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Column 1 0 Absolutely positioned in the wrong wayThere is a growing unease in financial and geopolitical circles that unlike past flare-ups, this Middle East conflict feels different. The usual assumption—that tensions will fade before markets reopen—is giving way to the realization that this crisis may not de-escalate quickly and could spiral into something far more destabilizing. Here are 10 positioning charts that shows that financial markets are absolutely positioned in the wrong way for this.
Column 1 0 That is grossGross leverage rose further in the past week and is back to the highest levels we’ve seen across hedge funds. JPM PI
Column 1 0 Going to need a bigger chartGS Prime: "US Fundamental L/S Gross leverage rose +3.1 pts to 213% which is the 99th percentile over the past 3 years." GS Prime
Column 1 0 Buy buy buyGlobal equities were net bought for the 6th week in a row. Net leverage for the overall book now way above where we were when the liberation day sell-off started. GS Prime
Column 1 0 Nets at 93rd percentileHF net leverage is back to the 77th %-tile over the past 12m and 93rd %-tile over the past 3yrs. JPM PI
Column 1 0 One of the biggest increases in netJPM Prime: "The change in global HF net leverage among All strategies is showing one of the biggest increases on a rolling 8wk period (+2z from below -2z in early Apr)" JPM PI
Column 1 0 One of the sharpest "risk on" reversals on recordA Societe Generale index tracking cross-asset momentum has this month staged one of its sharpest reversals on record, with nine of 11 components emitting bullish signals. Soc Gen / Bloomberg
Column 1 0 Retail ArmyRetail flows have of course recently been stronger than average. Goldman
Column 1 0 All-inMuch more long-term indicator, but still worth remembering. Investors are now "all-in" on stocks with the highest equity allocation in history. EPFR
Column 1 0 Double top?SPX is trapped inside that rising wedge formation we have been pointing out for some time. Highs have been losing steam, and it looks like we could be making a big double top (with the second high lower). Let's see how this plays out, but the 21 day around 5950 (futures) is a key level to watch. LSEG Workspace
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Column 1 0 Just in time?Bears throwing in the towel and bulls getting excited just in time for the latest move lower in markets. LSEG Workspace
