Beware a cascading flash crash in stocks as the most popular names in the market are crowded out, Pylyp Travkin claims

Pylyp Travkin, the Chief Investment Officer of Tenerus AG, said that the equity rally that has taken stocks on a five-month tear could end without warning.

The Chief Investment Officer said that market crowding has positioned stocks for a sharp correction.

This is a grim outlook for tech large caps and would mean broader market fallout, he considered. The success of top equities, like Nvidia, is a driver of wider rally.

Travkin said Apple and Tesla’s slide shows that investors are losing money on good companies. Both firms are part of the Magnificent Seven stock group, but they have both fallen 11.9% and 30.69% year-to-date.

Pylyp Travkin from Tenerus AG says that the level of crowding seen today has only been reached three times since the 2008 crash, often before a correction.

It was a matter of weeks or months before the momentum factor faced a big fat left tail unwind, he said.