ANALYST: We Have A ‘Bart Simpson’ Formation In The Stock Market

Stocks started the day in the red, surged, moved sideways for a while, and then tumbled on no obvious news.

So what happened?

Stifel Nicolaus’ Dave Lutz has three reasons for what he has dubbed the “Bart Simpson” formation.

  • Some “derisking” going on the tape today (and somewhat tomorrow) due to the holiday crimping liquidity
  • The potential downgrades of the three largest custodian banks shouldn’t be dismissed (BNY Mellon, Northern Trust, State Street may be cut by Moody’s)
  • Egypt getting worse. Shouldn’t be a a massive factors, but a reason to derisk.

Here’s a look at the move in the S&P 500 via Bloomberg with some colour modifications:

bart simpson