JPM Head Quant Explains How The Algos Traded The Brexit Crash, And Why He Sees “Elevated Risk”

from Zero Hedge

When looking at the kneejerk devastation in the aftermath of the Brexit vote, JPM’s head quant Marko Kolanovic said that he expects up to $300 billion in program selling, coupled with 5-10% in near-term downside to the S&P500. While Kolanovic was correct about quant and technical fund flows, what he likely did not factor in was the dramatic crisis response by central bankers who have now made it very clear their only mandate is to keep global equity markets disconnected from reality and artificially bid higher no matter the cost.

So what does he think happens now that the S&P has wiped out all losses from Brexit in the past three days?

Here is his explanation, released moments ago:

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