Hedge Funds Have Never Been This Bullish About Small-Cap Stocks

Tyler Durden's picture

The last two weeks have seen the biggest increase in hedge fund bullish Russell 2000 positions since July 2008 pushing the net speculative long position for leveraged funds to a record high.

The reflexive combination of hedge fund shorts being squeezed and FOMC Drift pushed Small Caps higher early in the week, but notably since the cut-off data for CFTC reporting, Small Caps have dropped...

Over 57,000 Russell 2000 e-mini contract longs were added in the last two weeks - the most since July 2008 - leaving hedge funds at their most bullishly positioned in US small caps ever...


But as Hedgies piled (or were squeezed) into Small Caps, investors panicced out of S&P ETFs at the fastest pace since Brexit...


And as traders exited S&P longs, they piled back into bond longs (pushing aggregate Treasury positioning back to net long and crushing Eurodollar shorts once again as rate-hike bets are unwound)...

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jamesmmu's picture
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Crypto-World-Order's picture

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ONEwarrior's picture

Wow! That is some old shit you shared there James.

Chippewa Partners's picture

The best hedge is a sale.   Seldom a hedge in a hedge fund.

mary mary's picture

Amen.  "The best hedge is a sale".

b a n n e d's picture
Zero Hedge  Have Never Been This Bullish!


My bad :)

mary mary's picture

Tyler, thanks for this post. 

This is very bullish news.  When smallcaps do well, most stocks do well.  I always watch smallcaps.  I have been waiting for them to break one way or the other.  If they break upward, it will be fast and hard.  I'm not in them, but I am in QQQ, which usually correlates fairly well.

Alchemedes's picture

 "If they break upward, it will be fast and hard."

The $RUT traded down from 1433 to 1401 last trading week. I would think a bounce now but if the hedgies are already 'all in' that if the $RUT breaks downward, they will do so much moar 'fast and hard'. No?



mary mary's picture

Maybe.  I would rather hear that they are buying than that they are selling.  At the very least, if they buy and then want to sell, they have to explain to their bosses why they made such a stupid mistake.

The Dogs of Moar's picture

Is this anything like when the "the cats and dogs" start to rally?

The Dogs of Moar's picture

Is this anything like when the "the cats and dogs" start to rally?

DelusionsCrowded's picture

Diversify investments into small companies with patents and productivity before the crash . The Leviathens corporations will be stripped bare when the fed stops helicopter money and consumers dry up .