Stocks normally take the escalator up and elevator down. Over the previous three months, it appeared the most popular retail stocks were taking the express elevator to the top floor (in part thanks to a record rise in call purchasing among a specific group of reddit “financiers”).
As an outcome, simply this weekend we observed that in this “bizarro market”, retail financiers had actually handled to outshine hedge funds YTD, a divergence which we said we “doubt divergence will last long”.
We didn’t have long to wait, and with stocks now skipping the elevator completely and going the gravitational freefall path and crashing back to earth with the Dow going into the fastest correction from an all time high considering that just months before the Great Depression …
… the Goldman Sachs Retail Favorite basket, after returning more than 16% YTD simply last week, is now down for the year (curiously, it is still exceeding the GS Hedge Fund VIP basket which since this morning is down more than 3% in 2020.)
And while we explained that retail momo darling Tesla has gotten crushed, it’s just one of the 50 or so retail favorite stocks that make up the Goldman basket. So for those wondering which stocks they should short if this is certainly the long-awaited retail capitulation, the answer is listed below: these are all the 50 stocks that comprise the Goldman Retail Favorites list.
Meanwhile, a glance at the r/wallstreetbets online forum on reddit, where the world’s most significant momentum chasers have actually now collected (even making it to Bloomberg in the process), and where a lot of millennials got very abundant, extremely fast, well … they are probably not rather as abundant any more.
— RANsquawk (@RANsquawk) February 27, 2020
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