Cem Karsan came into this week calling for a pullback and got one, but not the one he wanted. In this conversation he says so directly, takes the L on the size of it, and reverses. The reasoning is about flows rather than headlines. Heading into September opex there's a window where a decline can activate the downside open interest in puts and expand implied vol. Dealers are short puts and short stock, and that position is fine with sideways or slightly down. What hurts it is a fast, larger move. In the absence of that, the buyback and vanna flows come in and support the market instead. He puts a deadline on it: if it doesn't happen today into Tuesday, those flows turn supportive and the window is gone. On the Fed, he's been in the minority saying no hike, and he goes further here, arguing they won't raise at all. His case is what's actually been done rather than what's been said: a dovish vote at the last meeting, forward guidance removed, and a change in the inflation measure that ...