Tech surge, February fears and big China
February fears
"The dichotomy between the first half of February and the second half from a seasonal perspective. For those worried about any froth in the US markets, the last two weeks in February are historically the worst 2 weeks of the year. Given how well markets followed the historical analog last year, it’s something to have on the radar."
Source: GS sales desk
They are long
Asset managers and leveraged funds printing new recent US equity futures positioning highs.
Source: JPM
Shorts imploding
Another new low in short interest for SPY and QQQ.
Source: JPM
In tech we trust
We have just seen the biggest inflow to tech since last August. The crowd loves chasing after the big move has happened...
Source: BofA
What's "wrong"?
NASDAQ is basically trading at the same levels we traded at six sessions ago, at highs of that huge up candle. We have had two reversal candles, one shooting star and a doji, both indicating potential exhaustion in the short term. Let's see how this plays out, but the perceived bull has been stronger than the realized over the past sessions. 17k is the big support to watch.
Source: Refinitiv
Bar is low
Not for the Magnificent ones though. MSFT, GOOGL, AAPL, AMZN and META are all reporting between Tuesday and Thursday next week.
Source: GS
Spot up, volatility up - extreme edition
We have never seen this behavior in IWM...The classical "must chase" spot up, volatility up looks.
Source: GS
The big buy
The big China buy earlier this week has continued. Goldman's Lin writes: "In cumulative notional terms, the net buying in Chinese equities from Jan 23rd to Jan 25th is larger than any trailing 3-day period in more than five years (+4.4 Z score), driven by long buying."
Source: GS
but zooming out...
...you realize that positioning in Chinese equities remains at very low levels. Expect much more upside pain should we take out recent highs (big levels: FXI at 23, KWEB 25.5).
Source: GS PB
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