Sell Low, Buy High – And Ignore the Code Red?

From the Market Ear

Two weeks of “agony”

Two weeks ago, positioning was falling, HFs were net sellers, hedging was picking up, CTAs were cutting exposure, and Retail flow was fading. Shorts were working, and HF alpha held up. Now everything has flipped, buying has surged across cohorts, the 1-week change in JPM’s US Tactical Positioning Monitor is at +3σ, shorts are squeezing, and North America HF performance has turned tougher MTD.

The sharp swing from negative to strongly positive positioning leaves the market vulnerable if the Fed is very hawkish next week. But before you get too bearish, historically, big flips like this, late 2023 and late 2024, have tended to precede further market gains. (JPM market intelligence).

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