A range of indicators including investor positioning before the most recent slump in markets suggests that the drawdown is about half finished, and will prove to be less painful than the rout last December, according to JPMorgan Chase & Co. analysis.
“Since corrections tend to be largest when markets are expensive and over-owned and when market depth is poor, these indicators give a sense of vulnerability even if they cannot anticipate the timing of a random shock,” John Normand, head of cross-asset fundamental strategy at JPMorgan, wrote in an Oct. 4 note. “Entering October, vulnerabilities were moderate rather than high.”
While the