The headlines are currently dominated by stories or ‘financial explanations’ about the jump in U.S. equities as they enjoy one of the best weeks in months. AI, Fed pausing rate hikes, some decent economic data, and improving breadth are the most prevalent reasons. Digging a bit deeper, it’s the abrupt change in sentiment (40% bearish a couple of weeks ago, now 23%), gamma trade, money market inflows became outflows last week, and refilling of the general account sapping liquidity only for the repo market to give it back. And now we have the S&P 500 rallying to lift its relative strength (momentum indicator) into nosebleed territory.

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