JPMorgan Says Quants to Sell $50 Billion of Stocks If Chart Test Fails
- A break in S&P 500 below 200-day average could spur exodus
- Quants more sensitive to rout than a month ago: Morgan Stanley
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After fueling the big Wall Street rebound, trend-following quants now look poised to offload stocks if the S&P 500 falls below a key technical threshold, warns JPMorgan Chase & Co.’s trading desk.
Should the benchmark gauge slip under its average price from the past 200 days, so-called commodity trading advisors could be forced to unload about $50 billion of equities, the JPMorgan team estimated. The index on Friday came within 1% of the threshold, which sat near 3,940.