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The Most Crowded Trades
Herd-mentality, group-think, safety-in-numbers, or lemmings. When a trade becomes one-sided, we are often taught that contrarianism is the smarter position. When a trade becomes extremely one-sided, the market is at its most fragile. There are currently three trades that have become not just consensus, but are near record levels of extreme positioning - and with the help of leverage (and record margin levels) this all adds up to a risk-on market (since all the three trades are on the same side of the long central bank largesse, short safety view) that is over-prone to more significant corrections. Join the crowd or join the smarter money?
Crowded Trade #1 - US Equities.
Crowded Trade #2 - Short JPY
Crowded Trade #3 - Short Precious Metals
and it's at record-levels of margin...
Current levels of both Net Free Credits and Margin Debt indicate extremely bullish sentiment in the equity market, the implication is contrarian bearish.
But the 'smart money' is hedging...
Based on BofAML's exposure analysis, macro hedge funds continued to add to their shorts in risk assets including the S&P 500, NASDAQ 100 and commodities.
Charts: BofAML
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Include physical gold in the list too, hey goldbugs!
...and don't forget to include pedophile trolls who live in their mommies' basements !!
disinfo/paid troll......if it didn't work for them they wouldn't pay these guys
I feel absolutely fucking brilliant every morning with my S&P and RUT index shorts as my face gets ripped from my body. Talk about an out-of-body (or maybe that's out-of-mind) experience.
ho hum.....remember when these indicators meant something, and BofA Merrill wasn't a paid shill?
The net spec longs of the first three charts total $32 billion. How big is QE per month? Ergo, facerip.
I'd rather be more on than more off, maybe you can't read the gold chart that's included with all the chart porn. The day everybody is rushing to buy gold instead of trying to berate it is the day I will think about unloading some of it.
Wake me when the fiat price in dollars is back under $300 an ounce. That's my dollar cost average on my physical holdings. I never have a problem exchanging it for the "fiat du jour" or the value of another's labor. So many paper promises in the world today, so little assets of real value, good luck with that.
I'm getting tired of you bragging on every gold thread, LOP. "Oh, look at me, I'm dead sexy with my $300/oz dollar cost average, ohhhh, I bought when everyone sold, oooh, I'm sexyman."
/s
Funny, nice sarcasm. Personally I'm tired of the "goldbugs are wrong" bullshit. See the great thing about freedom is that no one forces anyone to read anything, or even respond for that matter. Yet so many feel inclined to do so Personally, I like having that freedom. Many of us had grandparents who survived a great depression and two world wars, some of us just happen to be paying attention to what they said I guess. Sorry, I am getting distracted, did you have an actual point or tip for us? Please, I really do want to find other investing avenues. My current ones make me look like a kook.
You just made another point for me. You see, I'm not very quick. In fact I am slow and dull.
There are things on this earth that can be valued across generations. These things resist the daily ebb and flow of the currents of trade and money, in fact when they seem to show sudden changes in price, you are seeing more a reflection of drastic changes in the marketplaces (and the surrounding economies) than a change in the value of the thing.
The quicker minds seem to always be chasing tops and bottoms, and trying to gain inside information and be privy to the skinny before everyone else.
The slower minds build wealth in such a way as cannot be refuted by daily, weekly, monthly, and yearly fluctuations.
LOP,
I have one for you that you might appreciate. I have a grandmother who is 85 with a 6th grade education, who was told by her grandmother with a 4th grade education to never sell your gold or gold jewelery. Some things are just time tested and true. BTW, yours truely convinced his mother to reduce her purchases of gold in 2000-2001 at 280/300 oz, cuz it doesn't pay a dividend and go up like stocks. I now apreciate the wisdom of some elders
That's funny, because I can count the number of people I know who own physical gold on NO hands. If bullion is a crowded market, where's the crowd?
Unfortunately, by the time your "crowd" figures out that they NEED gold or silver, there won't be any physical to be had....other than what's yet to be mined. Good luck with that play!.
Bullion SHORT is a crowded market. The chart shows Bullion LONG speculator positions, and its at quite the low, hence there are a lot of short trades on at the moment. AKA the Fed and JP Morgue naked short selling futures contracts. (sorry, the chart shows NET speculator positions, so either there was a reduction in longs, or a lot of short positions were initiated)
YES
https://www.youtube.com/watch?v=WAaVK5AkZzI
Uploaded on Nov 29, 2009
Price is Right style, Mark Dice offers over $1000 worth of gold for free to random people walking by beach if they know how approximately how much value it has.
This cheers my day up every time I watch it:)
Its not just that the people don't know, its that they are oblivious to the fact that they have no CLUE. And what is funny, is how WAAAAAAY off they are. $17, $10, $1, thirty seven cents.... And gold is in a bubble... Ask them how much real estate is in the area... Bet you people could tell you that +- 20%!
None of your friends are of Asian descent, right? In that part of the world, folks are buying with two fists. Here as well - your friends must have their heads in the sand. Call a coin dealer here and see how quickly they can deliver.
Savvy physical gold owners don't advertise to people who know where they live.
>>When a trade becomes one-sided<<
Gold coins = yes
I am not picking on you Tyler, Keep writing. We like you:)
Seems everyone is saying the DOW is to high.
we live in bernanke's twilight zone where smart-money is dumb money and dumb-money is smart-money and where following the herd is being contrarian.
Actually the herd is always right even when it's wrong simply because the herd is a force too large to mess with. The herd-market has always been stampeded in either direction throughout history.
The markets do not move. The markets are moved. Benny and the InkJets have simply added fuel to the fire.
Yep, Psychology-Sentiment is a good trade also. So is Seasonality.
Economics is a social phenomenon and is better understood as a social "science".
I'm too hung over to wrap my head around that statement, so I'll just give you a + for confusing me.
I'm with the CIA, but I tell people I'm with the CIC, so they think I'm with the CID.
The unsinkable Titanic Molly Brown Ponzi fueled stock market.
Strongly reminds me of the "Andrea Doria": http://en.wikipedia.org/wiki/SS_Andrea_Doria ;-)
Why did the passengers on the Andrea Doria not clean their hands before dinner?
They thought they'd just wash up on shore.
Commodities --gold, coffee, copper, etc -- have been beaten down so bad while stocks at their all time high ....MSN financial web site recommends buying these commodities and dumping your stocks...take your profits...interesting.....I definitely sold sotcks and took money off the table since ... Kotlikoff says the GUbbermnint is going to print trillions moar for SS and other gubbermint programs....
I'm a Cheap Bastard.....
85 billion per month, indefinitely, soon to become 120 billion, then 300 billion, where is this hot money going to flow? Place your bets...
Paper fucking promises, nothing more. Mind if I see the underlying collateral?
Just don't make bets, dont use options or futures, and your investment in commodities should be a fairly good idea. There are a lot of silver and other commodity producers that have been beat up big time. As long as you aren't using borrowed money (aka margin) there are some good deals out there (CDE, SLW), depending on how much risk you are willing to put up with.
Dow 15000 here we come! I'm so excited!
PHILOSOPHY OF LIBERTY
http://www.sedm.org/LibertyU/PhilosophyOfLiberty.htm
How to Leave the Government Farm
http://www.youtube.com/watch?v=H2YBlUIA-KY
If you take a look at http://www.ici.org/research/stats, even though sentiment is high for US stocks, the influx of mutual fund and ETF inflows could keep it there for a while.
When the bulls stop buying, then take your position since no one can keep the price up any longer! =D
The reversion to the mean of long stocks short gold is inevitable. The world's dumbest trade took all the power of the government and the government supported banking system to support for a few months. Like an army charging into the sea to combat the waves, once the splashing is over, the tide still comes in.
Complete miss!
$ US
No short yet ... they are going to run stops at 162 SPY and then fire at will ... I do like the underwhelming response to the upward revisions this morning ... wait until you see the whites of their eyes lads.
STEP right up, place ya bets! EVERYONE'S a WINNA! Don't worry, we got a guy inside who has yer back named Bernank! Ya just can't lose....go to the window borrow some money and spin the wheel!
When the last three graphs hit the net short zone, I'm going all in long on this pig shit of a market. HF's have been nothing but wrong time and time again since the crisis. Just remember that most of the time, banks are the CP to the HF bets.
I was flipping the channels this morning and saw the latest episode of "Becky does Warren's shriveled up old cock" was on CNBC. Must be bullish. Get the old fraud Buffett out to trumpet buy and hold.
Great information. Thanks for posting. However, it's not clear whether a crowded and well overbought s&p will bow to history and yield a correction with the central bank actively pursuing higher stock prices.
What about Crude oil and natural gas - some record and near record longs there
I'm not sure what I just read. I'm just going to look at my stack of silver and be happy that my exposure to the stock market is minimal at the moment.
It seems the BOMB doors are open, now allthat needs to happen is to let it DROP then IMPLODE! Let the BS END!
To paraphrase Laurence Durrell - these trades are like nags, you ride around on them until you're tired of them, then you tie them to a tree and f**k 'em.
....and hedge funds - a pack of chimpanzees running around in a circle with their fingers up each others' asses.
'we are now entering the twilight-time zone of a 'hyper-contrarian gravitational model', last seen in 1986... as spiraling amorphously about a 'trailing halley's tail-- where equillibrium is the trade-off?'
Hedge funds are hedging