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A Summary Of What Hedge Funds Are Buying And Selling

Tyler Durden's picture




 

Large speculators reduced ther S&P 500 positioning to net short this week and their NASDAQ longs to a one-year low as BofAML reports on CFTC data. Macros funds decreased their long exposure to S&P500 and NASDAQ to now hold short exposure. They also decreased their long exposure to US Dollar (raising their AUD longs to a record high) and maintained their long exposure to 10-year Treasuries. They decreased their long exposure to commodities and increased their long exposure to EM. Across all asset classes, positioning is at extremes.

Significant HF moves across asset classes, based on CFTC data

Equities. Large specs decreased S&P 500 to net short and reduced NASDAQ longs. They also increased Russell 2000 shorts last week

Agriculture. Large specs increased their long positioning in Soybean futures but decreased longs in Corn and Wheat futures

Metals. Large specs decrease Gold and Silver longs and increased Copper shorts. They maintained Platinum and Palladium longs.

Energy. Large specs increased their Crude longs and Gasoline longs. They also increased Natural Gas shorts but Heating Oil shorts.

FX. Large specs increased their EUR, AUD and GBP longs. They decreased their JPY shorts and MXN longs position.

Interest Rates. Large specs increased their short positions in 10-year while increasing their long position in 30-yr. They also reduced 2-year shorts

 

One can't help but see this positioning and wonder just who the big boys are selling to - as we noted here,

Based on Bloomberg's Smart Money Flow indicator, there is a very significant amount of distribution going on... the question is just who is soaking up the smart money selling? Company buybacks, Johnny 5, or a greater-fool retail investor?

 

 

Perhaps this chart from Lance Roberts at STA Wealth provides some color for who?

 

However, the idea that individual investors are still "out of the market" should be taken with a bit of caution. The chart below is data compiled by the American Association of Individual Investors (AAII) which surveys it membership on portfolio allocation.  The data is compiled and released monthly. 

 

 

 

With cash hovering at the lowest levels since the "Tech Wreck," and equity exposure at the highest, investors are more than just "warming up" to equities. They are effectively "all in" with respect to the financial markets.

 

 

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Mon, 04/21/2014 - 11:40 | 4679606 asteroids
asteroids's picture

I think hedge funds could completely go to cash and nothing much would happen. The FED has printed SO much money that it doesn't matter any more.

Mon, 04/21/2014 - 11:47 | 4679627 Youri Carma
Youri Carma's picture

So what? Do the Hedge Funds make the markets today? The exact question on which you gave an answer which came to my mind first.

Mon, 04/21/2014 - 12:09 | 4679696 Caracalla
Caracalla's picture

You nailed it!  And, there is just as much if not MOAR still to be printed!

Mon, 04/21/2014 - 11:45 | 4679613 Racer
Racer's picture

Shorts??

Bend over and assume the position

                        NOW!

 

Mon, 04/21/2014 - 12:01 | 4679672 SmilinJoeFizzion
SmilinJoeFizzion's picture

replace "shorts" with "retail" as this is really starting to look top-heavy

Mon, 04/21/2014 - 11:45 | 4679620 dontgoforit
dontgoforit's picture

Meh - release the Kracken.

Mon, 04/21/2014 - 11:50 | 4679638 Youri Carma
Youri Carma's picture

Meh, what's up Doc? https://www.youtube.com/watch?v=X--Ly7pL8aw The exact question on which you gave an answer which didn't came to my mind.

Mon, 04/21/2014 - 11:57 | 4679658 pachanguero
pachanguero's picture

Long the AU!

Mon, 04/21/2014 - 11:57 | 4679660 Spungo
Spungo's picture

We shall print on the beaches, we shall print on the landing grounds, we shall print in the fields and in the streets, we shall print in the hills; we shall never admit we destroyed America.

Mon, 04/21/2014 - 12:05 | 4679684 scubapro
scubapro's picture

who are they selling to??  retail, of course.  despite talk of 'jitters' or nervousness  from the teevee, retail hasnt lifted a finger--as they have been trained to do nothing, and employment and growth are just around the corner, along with better weather.---anyone else notice how the msm talks about better weather from Feb to March, but discounts the yoy issues?   of course its better in March than Feb!

each month the marginal cash to buy is decreased.   consider the concept of the 'tipping point' or even 'event horizon'.  retail has now been 'taught' that 8% decline in nasdaq and 4% in spx is nothing.    major b/ds continue to tell them to be overweight equities and underweight duration, despite the past 100 days of information.   the most common 'reason' is that the last times signif multiple expansion has occurred, mkts continued to be green for another 12-24 months, like in 1986, 2000, and 1991.      

also these charts are a week old and their data is a week old, so really were looking a couple weeks back, not this past Friday's ending data.

Mon, 04/21/2014 - 12:07 | 4679695 Caracalla
Caracalla's picture

All of this is background noise....just BTFD.  Yellen & Co. will never allow a signaificant decline so there is no risk in being long equities...just BTFD

Mon, 04/21/2014 - 12:18 | 4679717 Kreditanstalt
Kreditanstalt's picture

How REACTIVE.

Buy whatever is rising TODAY or looks like it MIGHT go up in the next five minutes...

Mon, 04/21/2014 - 13:01 | 4679915 I Write Code
I Write Code's picture

Are these percentages being diluted because a secret buyer is consuming the market?

Mon, 04/21/2014 - 14:34 | 4680270 kaa1016
kaa1016's picture

In other words, when these guys start beta chasing again, the S&P will break out above 2000. If we break 1897/1900 on the S&P, we'll run another 100 - 150 points. Still way too much money in the system.

Mon, 04/21/2014 - 14:55 | 4680370 dragoneyes74
dragoneyes74's picture

Last week I let my trailing stops (which I wish were tighter) and targets get hit to flatten out b/c I'm not trading this week and early next week, with one exception: I'll be watching gold during the Comex session.  I bought some puts b/c I think they're gonna flush it out soon and I don't want to deal with a stop.  If I'm lucky and it happens in the "crush metals" hour I'll look at shorting it at $1275.  If there's not an instant reversal I'm thinking we make it to the lower half of the $1200s and then we'll see what's happening with the dollar and the Fed.  We could be in for another leg lower in the metals unless the dollar rolls over soon.  I'm done with the long side unless it clears and holds in the $1330s.    

With Fed day and NFP next week I'm hoping we see a continued squeeze in equities to setup another short.  I'd love to see the NQ peak out anywhere from 3580 to 3630 to form the perfect right shoulder.  A loss of 3400 is total devastation for the NQ.  That's where you can get aggressive.   

 

 

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