Going long is difficult, and shorting is also hard! Nomura strategist: "With the current macro volatility, trading carries career risk." Goldman analyst: "Cash is king."

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The ceasefire negotiations between the US and Iran are repeatedly stalled, and the market is struggling to find direction amidst sharp fluctuations in oil prices. Analysts from Nomura and Goldman Sachs have issued warnings: under the current environment, traders face extremely high risks regardless of whether they are long or short.

Overnight, after the US proposed a ceasefire plan and was rejected by Iran, oil prices plunged sharply but almost recovered all losses by the end of the day. However, the stock and bond markets did not retreat synchronously with the oil price rebound, resulting in a rare divergence. Meanwhile, Bitcoin and gold strengthened against the trend, while the dollar closed basically flat.

Against this backdrop, Nomura strategist Charlie McElligott warned, currently, the accumulation of macro volatility has created "career-level risk", and a large number of traders are actually paralyzed;

Goldman Sachs analyst Shreeti Kapa said bluntly that in a binary risk environment, "cash is king"—given that equity risk premiums are near zero and valuations are at historic highs, holding cash is a reasonable asymmetric position.

Sharp swings in oil prices, rare divergence between stocks/bonds and oil

After the ceasefire proposal news came out, WTI and Brent crude prices plunged 6% to 7% from the previous day's highs, then almost fully recovered losses at the close. However, stocks and bonds did not come under pressure from the oil rebound—the four main US stock indices all closed higher, though weakened toward the end of the session.

According to Bloomberg, the negative correlation between the S&P 500 Index and WTI crude has now lasted for 17 trading days (since March 3), a level surpassed only twice since early 2022, highlighting the abnormal state of the current market structure.

It is noteworthy that the entire day's stock gains were concentrated almost entirely within a few minutes after the ceasefire news was released, after which the indices remained flat. From the performance after the cash opening, the four major indices actually all recorded declines and failed to break through key technical resistance levels, and the short covering at the opening did not yield sustained momentum.

Nomura: Macro volatility clustering, traders generally paralyzed

Nomura strategist Charlie McElligott pointed out in his latest commentary that despite the temptation to trade reversals, hedge volatility squeezes, and beta sell-offs, traders are generally in a "paralyzed" state due to multiple overlapping risks.

McElligott listed five core pressures: first, the current clustering of macro volatility constitutes "career-level risk", and in the context of recent events, it is extremely difficult to get approval for shorting put options or tail-risk shorts; second, there is widespread skepticism about a "quick resolution" to the conflict, because structural damage to the global economy from commodities supply shocks and the prospect of central banks raising rates amid fragile growth are unlikely to be resolved in the short term.

Additionally, he highlighted three other risks fermenting synchronously: clear signs of deterioration in US employment trends; the ongoing disruption of industries by AI further impacting the labor market; and redemption and liquidity crises in the private credit market.

Goldman Sachs: High valuations, risk premiums near zero, cash is a reasonable asymmetric position

Goldman Sachs analyst Shreeti Kapa evaluated the current market from a more macro perspective. She noted that since the outbreak of the Middle East conflict, the MSCI Global Index has cumulatively declined by about 7%. Although historically this is a moderate pullback, the current valuation environment is much more fragile than in previous crises.

Kapa emphasized that, compared to the 2022 energy shock, current equity valuations are not only higher than those lows but also higher than pre-shock levels, and this holds true across multiple valuation indicators. She also noted that the market has basically digested the rate shock but has priced in limited growth risk—this contrasts sharply with 2022, when real yields surged from negative territory, bringing larger-scale rate shocks.

Based on the above, Kapa concludes: In a binary risk environment, the value of optionality and liquidity outweighs directional bets. "In such environments, the investors who outperform are not those who accurately call the bottom, but those who have cash ready to deploy when uncertainty dissipates."

She said that given current equity risk premiums are close to zero and valuations across regions and industries are at historical highs, holding cash is essentially a reasonable asymmetric position—investors forfeit almost no expected return, yet gain considerable flexibility.

Risk Disclosure and DisclaimerThe market has risks, investment needs caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. Investment based on this is at your own risk. ```