The Weekly Equity Write-Up: Hard To Get A Selloff When Everyone Is Positioned For One!

Alpha generation always accounts for positioning

“The more things people worry about the better for an investor, because those worries are already instantiated in the overall market.”

-Bill Miller

Positioning Pulse

We’ll start with positioning this week because I want to engrave this as the most important aspect of trading and investing. Over the past week, I’ve had many calls with friends of mine both on the sell-side and buy-side and they all asked me the same question “When is this S&P rally going to stop?” ….. My simple answer “It could pause the next two weeks but don’t expect a 10% drop in the S&P”.

The reason for this is that 1.) Active managers continue to be very well positioned for a higher-for-longer rate environment which is the narrative being pushed down everyone's throats by the same financial outlets that were saying we’ll get 6 to 7 cuts this year. Entering the week active managers we’re net short -224k ES1 Contracts which proves my point on their defensive posture into the upcoming macro events.