It may not have been Black Monday but it sure as heck was a very red week.
Exactly one week ago we warned that according to BofA's excellent derivatives team the technical picture was about to go pear-shaped, because with CTA deleveraging and selling triggers about to stopped in (as the S&P dipped below 5,079), leading to even more stop-losses, vol-control liquidations, and ETF unwinds, the gamma picture was one where dealer selling would only accelerate the further stocks dropped, while the lack of corporate buybacks (the buyback blackout period is near its peak and will end on april 26) and a general lack of BTFD sentiment, would only make matters worse.
In retrospect this was spot on and culminated with what we described as the worst week for the Nasdaq in three months, which is now down 6 weeks in a row.
