Since February, "nothing else matters" but the $200 billion or so per month of central bank money printing and asset purchasing. Correlations across asset classes are at or near record highs (putting risk parity funds in grave danger) with global bond yields at record lows and stock prices at record highs. However, as one veteran trader exclaimed, "they all on the same side of the boat again," pointing to the record speculative long positioning in US equities and record speculative shorts in VIX… a situation, he says, "can only end in catastrophe."
Everyone's "all-in" on the fear of not conforming to the norm… Buy Everything Stupid…
And the momentum chasing is just getting worse… As stocks go higher and vol goes lower, leverage speculative positioning is just chasing that trend adding to already record extreme positioning…
Interestingly – despite record low bond yields – speculators have swung back to an aggregate short Treasury Futures positioning…
So to clarify – the "all-in"-ness of the speculative traders has never, ever been so high across asset classes – record short VIX futures (an implicity leveraged long trade), record longs in Dow and Nasdaq futures, and surging shorts across the Treasury complex (implicitly a long stock trade if 'norm' correlations revert)
What could possibly go wrong?
The post “Everyone’s On The Same Side Of The Boat Again” – Hedge Funds Have Never Been More “All-In” appeared first on crude-oil.top.