Mislav Matejka, head of strategy at JPM and a leading voice of the long term bull is slightly changing message:
1. relief bounce is likely given heavily oversold conditions, but markets to remain under pressure for longer…
2. now believe that stocks will remain under pressure for longer.
3. Expect an imminent relief bounce–
4. markets will s…[Read more]

Positioning for Equity L/S hedge funds
1. Gross leverage decreased -4.4 pts – the largest week/week decline in more than two years – to 169.5% (22nd percentile one-year)

2. Nets increased +0.2 pts to 48.6% (95th percentile).

Institutions sold a very large $39bn of US equity, close to 4x std-dev and the biggest weekly $-size on record and broadly consistent with other big risk-off periods ($37bn during the biggest week in Oct-18, $32bn in Aug-15 and $25bn in Mar-18

In terms of market manifestations, there is nothing new here. The details might be different, at least a little, but the market behavior is the same. If that is the case, and it is, then that means there is no reason to deviate from whatever investment process you chose for yourself as being best for you, when emotions weren’t muddying the waters.…[Read more]