Blink and you'll miss the meltup.
Just moments after Bloomberg blasted a market comment note that was woefully late by the time it hid the terminal...
... with many expecting that today's better than expected Retail Sales control group and the hawkish comments from Waller would finally prompt some selling, the short squeeze we warned about three days ago (see "Why The Non-Stop Squeezes: Stubborn Hedge Funds Are Most Short The S&P In 12 Years") kicked in, pushing spoos above the upper end of the channel that had defined the market's narrow range since the start of the month...
... pushing stocks to the highest level in two months.
What's behind this latest spike? Why the same thing we have been warning bears about for the past six months: overly bearish technicals and positioning. Here is Goldman's John Flood echoing what we have been saying:
Our PB (prime brokerage) data shows aggregate US Financials long/short ratio standing at 2.05 (vs. 2.64 at the start of 2023), the lowest level since Mar '20. Negative sentiment and light positioning remain as steady mkt tailwinds (much to the chagrin of many HFs). Investors are bracing for the worst in regards to earnings (not exclusive to banks) which makes me believe risk is skewed to the upside as earnings really get going. At this point “OK prints” will be good enough...
Sure enough, blowout earnings from JPM and solid earnings from the banks means that all the dire, apocalyptic expectations for all hell to break loose this earnings season will have to be shelved for at least another three months.
Blink and you’ll miss the meltup.
Just moments after Bloomberg blasted a market comment note that was woefully late by the time it hid the terminal…
… with many expecting that today’s better than expected Retail Sales control group and the hawkish comments from Waller would finally prompt some selling, the short squeeze we warned about three days ago (see “Why The Non-Stop Squeezes: Stubborn Hedge Funds Are Most Short The S&P In 12 Years“) kicked in, pushing spoos above the upper end of the channel that had defined the market’s narrow range since the start of the month…
… pushing stocks to the highest level in two months.
What’s behind this latest spike? Why the same thing we have been warning bears about for the past six months: overly bearish technicals and positioning. Here is Goldman’s John Flood echoing what we have been saying:
Our PB (prime brokerage) data shows aggregate US Financials long/short ratio standing at 2.05 (vs. 2.64 at the start of 2023), the lowest level since Mar ’20. Negative sentiment and light positioning remain as steady mkt tailwinds (much to the chagrin of many HFs). Investors are bracing for the worst in regards to earnings (not exclusive to banks) which makes me believe risk is skewed to the upside as earnings really get going. At this point “OK prints” will be good enough…
Sure enough, blowout earnings from JPM and solid earnings from the banks means that all the dire, apocalyptic expectations for all hell to break loose this earnings season will have to be shelved for at least another three months.
Loading…
