Hedge Funds have increased their short stock positions for 14 consecutive weeks, the longest streak in history
Source: Win Smart, Goldman
Hedge Funds extended short positions on Treasuries to a record just before smaller-than-expected US bond sales and weaker jobs data spurred a rally
Leveraged funds ramped up net short Treasury futures positions to the most in data going back to 2006, according to an aggregate of the latest Commodity Futures Trading Commission figures as of Oct. 31. The bets persisted even though the cash bonds had rallied the week before. Source: Bloomberg
Last week "pain trade" in one chart
-> Last week's Risk On move has pushed Hedge Funds to cover their shorts, triggering violent short squeezes. The Goldman Sachs Most Shorted Stocks Basket jumped by 13% over the week. Source: Bloomberg, HolgerZ
Hedge Funds were quite short going into November
Source: Markets Mayhem, GS
Yes, Hedge funds are short equities
But don't forget the bigger picture: positioning among asset managers and leveraged funds is rather long... Source: TME, JP Morgan
Hedge funds have now built the largest short position in U.S. Treasuries in history
Source: DB, barchart
A tale of two type of investors...
who will be right? Hedge Funds continue to short treasuries at historic levels while asset managers are building their largest long positions ever recorded! Source: FT, Barchart
NASDAQ's 1999 analogy chart isn't perfect but given the amount of shorting by hedge funds and short gamma selling by dealers, a squeeze in Q4 (the historically strongest quarter) is a possibility
Source: TME
