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Wrong Again: Hedge Funds Start 2015 Most Long The S&P Since 2013; Most Short The 10 Year Since 2010
It appears "the trend is your friend" is only a mantra that 'speculators' are willing to follow for stocks as the incessant rally in US Treasury bonds has led traders to position for higher rates at the largest level since May 2010 (more short squeeze, rates to 1%-handle ammunition?). However, the surging stock market has merely encouraged more to follow that trend as S&P 500 specs are the 'longest' since July 2013. Just as we noted previously, this is deja vu all over again for hedgie positioning into 2014 (but even more extreme)... and that was a painful year for most.
This is unlikely to end well...
As the ammo for more stock short squeezes is removed...
As BofAML notes,
Equities. Large specs bought S&P500 contracts increasing net long positioning to largest since July 2013. Specs also bought Russell reducing net short positioning. Russell has been bought in 10 of past 13 weeks. MAA suggests S&P500 and Russell buying pace may reduce while technicals are also near term negative.
Interest Rates. Specs sold 10-yr contracts increasing net short position to largest since May 2010. Technicals suggest near term risk for yields is to the downside.
Charts: BofAML
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it's really scary out there. abandon all paper, those who enter here.
How can ZH know they are wrong? Today is only Jan. 6.
Let's draw conclusions on Dec. 31.
I expect more of the same in 2014.
It makes me wonder how many of them have algorithms set up well enough to get out before any major losses. It's no longer mainly investing in companies for their production and value. It is a speculation game. The bast algorithm that gets in and out at the right time wins.
Algorithms, Smalgorithms......all you need is a telephone and a quite place to receive calls
One day in the very near future. Yellen "We recommend people buy stocks, as we have switched our primary policy to making sure the stock market will always have at least a 10% yearly return."
(In nominal terms)
"and to help eveyone along we are converting your 401K to our new stock plan"
Bah! It'll be fine. You'll see.
Oil is the story now. fuck everything else until that shit-show is over.
This is what we bailed out in 2008?
I wonder what 750 trillion gets ya?
Hedge funds were never bailed out in the financial crisis. Banks, yes. Insurance companies, yes. GSEs, yes. But not hedge funds.
Hedge funds are where you place your money for the last 5 years if you want to underperform the market with a high probability of outright losses while having the privilege of paying "2 and 20" in fees.
Even my folks, staunch Obamanoids and faithful Stawk market Bulls, are shitting themselves....something's panicking the herd out there.
That 8000lbs oil derivative gorilla should make you scared.
If they unwind violently, no doubt the other quadrillion will follow.
Almost like it was deliberate on somebody's part.
OT: US 10 yr down another 6+ percent this morning after yesterdays 4% drop. Now @ 1.98 What The heck is blowing up behind the scenes?
i think there is a default somewhere, with who or with what i don't know
Sorry edit I meant an additional 3% down today. But still what a Derivative or Swap blowup somewhere?
Exactly....I picture Yellen frantically wrapping more duct tape around a big pressure cooker
What? It's working perfectly. You have a problem with this?
If you think 1.98% yield is "panic zone", just wait until it's 0.98% or 0.098%. Laugh all you want but it's coming.
ZH: Very simple. You have to report the financial news twice:
The first based on economic reality like supply and demand, reward vs risk.
The second based on the alternative universe of government and bank control whereby the laws of human nature no longer exist.
matter vs antimatter
Taking a leaf from the Chinese, I would not be surprised if Obama announced a new "storage ready" building plan...to build new oil storage facilities to mop up the excess capacity, using the argument that it will promote US long term energy independence.