Hedge Funds Have A Record Net Short Position In Nasdaq Futures

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Includes: CORN, DIA, EWJ, FXB, FXE, GLD, QQQ, SGG, SHY, SLV, TLT, VXX
by: Free CoT Data

Summary

Bonds: Institutional investors are betting on lower short-term rates by being very long the 2-year.

Commodities: Money managers love gold, silver, and sugar.

Currencies: British pound shorts are bailing before the Brexit vote.

Stocks: Hedge funds are super short the Nasdaq, much less so the S&P 500 and Dow.

In a previous article, I outlined my approach for analyzing CoT data to reveal how different types of traders are positioned in the futures markets. If you missed it, give the article a read to see the method behind my analysis.

This is the eighth in a series of weekly updates that outlines how traders are positioned, and how that positioning has recently changed. There are some key differences between this update and previous articles. Over the past week I've revamped my CoT charts to 1) look better and 2) include additional trader types for financial futures.

I break down the updates by asset class, so let's get started.

Bonds

Hedge funds are very long the 30-year bond (NYSEARCA:TLT) while institutional investors still have record high net short exposure.

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Complete opposite picture in short-term bonds (NYSEARCA:SHY). Institutions are extremely long the 2-year, betting on lower short-term rates.

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Commodities

Not much new in commodity futures. Money managers are still super long gold (NYSEARCA:GLD) and silver (NYSEARCA:SLV).

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Commodity producers and users have been quick to sell corn (NYSEARCA:CORN).

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Money managers are still very bullish on sugar (NYSEARCA:SGG).

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Currencies

An interesting development in Euro (NYSEARCA:FXE) positioning. Institutional investors have reached a 5-year net CoT position percentile of 100%, meaning they're more net long Euro futures than they've ever been in the past five years. The currency has been stuck in a range for the past year and many sell-side analysts are still calling for parity with the USD.

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Hedge funds have kept covering their short in the British pound (NYSEARCA:FXB) before the upcoming Brexit vote.

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Stocks

Positioning has been the most interesting within stock futures. Over the past few weeks, institutions have been cutting their long exposure in Dow (NYSEARCA:DIA) futures. That changed this week. They're back in size.

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I'm very surprised at what's happening in Nasdaq futures (NASDAQ:QQQ). Hedge funds have a record high net short position on, while they're fairly bullish on both the Dow and S&P. This is a unique divergence that's rarely seen.

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Institutional investors have been quick to buy up Nikkei (NYSEARCA:EWJ) futures.

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Finally, hedge funds have cut back a bit on their record high net short exposure to VIX (NYSEARCA:VXX) futures. Institutions have started bailing out their long VIX positioning.

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Conclusion

  • Institutional investors are very long the 2-year, betting on lower short-term rates
  • Gold, sugar, and silver are crowded longs among money managers
  • The Euro has attracted a lot of interest from institutions
  • Hedge funds are extremely short the Nasdaq while they're much more bullish on Dow and S&P futures

If you've got any questions about CoT data, don't hesitate to ask me in the comments below.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.