The firm argues that there is little conviction to the recent rebound
According to the firm's equity-derivatives strategist, Mandy Xu, investor sentiment remains extremely cautious and that in the options market, investors have taken advantage of the bounce by resetting hedges - rather than adding to longs.
Xu points to the measure of how expensive bearish options are compared with bullish ones, using that as a gauge to judge that investors 'have no faith in this rally'.
Adding that while tech stocks have been outperforming, they are more at risk - with the sector still heavily overweight - if there is widespread deleveraging once again in the market.
