TME Daily: Hedgies retreat, tech tanks and energy's blaze

The Market Ear Picture

Biggest de-risk of the year

Fundamental hedge fund net leverage has come down a lot since August highs and is now at YTD lows.

Source: GS Prime


Shorts at the bottom of a tight range

Short interest on individual stocks within the S&P500 as % of outstanding share.

Source: JPM


Leaders falling

The leadership gap has fallen from extremely elevated levels. Barclays, who pointed out the extreme readings weeks ago, writes: "The gap narrowed from a peak of 7.8% (99th percentile) to 2.0% now (~80th percentile)".

Source: Barclays


Hedgies selling tech

"Smart" money has been selling a lot of tech since August.

Source: GS PB



The percentage of stocks trading above the 50 day moving average has collapsed.

Source: Tier1Alpha


Higher for longer - energy edition

JPM upgrades energy. Main bullets:

1. Capital Slowdown: Prolonged high rates diminish new supply investments.

2. Equity Costs Rise: Cash breakevens surpass $75/bbl Brent post-buybacks, elevating oil's marginal cost as more cash returns to shareholders.

3. Transition Pressure: Accelerated shifts from hydrocarbons due to institutional and policy pressures amplify 'higher-for-longer' energy prospects, predicting a supply/demand gap of 1.1mbd by 2025, growing to 7.1mbd by 2030.

Source: JPM


Oil - not moving because of the global recovery

Oil, BCOM and BCOMIN needs little commenting.

Source: Refinitiv


Sudden energy love

Can't really blame them, although we are far from "bullish" levels.

Source: GS PB


Dollar's golden cross

Like it wasn't enough...the DXY golden cross is now in place. There are some resistance levels around here, but a proper close above 106, and this risks squeezing even more....

Source: Refinitiv


Dollar shorts covering

Dollar shorts have been brutally punished during the recent rise in the dollar. Imagine they start going net long...

Source: JPM


See TME's daily newsletter email above. For the 24/7 market intelligence feed and thematic trading emails, sign up for ZH premium here.