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

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)...

Comments

mary mary Sun, 06/18/2017 - 19:17 Permalink

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.

DelusionsCrowded Mon, 06/19/2017 - 02:28 Permalink

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 .