Even as tech shorts have meaningfully increased their activity, Nasdaq 100 longs have tried to put foot down just under the 50-day. A takeout of the average can shift sentiment – duration notwithstanding. Tech bulls are trying hard to put … Continued
Following futures positions of non-commercials are as of July 28, 2020. 10-year note: Currently net long 73.2k, up 44.1k. The 10-year treasury yield lost five basis points this week to 0.54 percent. Five-month support at 0.57 percent has been breached. … Continued
Between March and June, FINRA margin debt increased $105.4 billion, providing a nice tailwind for stocks. As a percent of disposable personal income, margin debt dropped to 2.8 percent in April, down from 4.3 percent in January 2018. Historically, peak-to-trough … Continued
Bulls just wasted a huge opportunity to squeeze non-commercial shorts in e-mini futures. This is coming at a time when the Fed’s balance sheet is no longer growing at a breakneck pace, which stocks cherished earlier. Longs probably wasted a … Continued
Margin debt rose in April. US stocks had a very good April. Yet, investors do not seem to be in a mood to aggressively add to leverage – the same way they are leaning more toward large-caps than small-caps. FINRA … Continued
On Monday, the Russell 2000 busted through 1250s. This has been an important price point going back five years. Despite lofty earnings expectations for both this year and next, this week’s action is a thumbs-up from markets. As long as … Continued
If not for the intraday reversal, the S&P 500 Tuesday came very close to ending the ongoing bear market. Regardless how things shake out near term, at least until February, margin debt stood elevated – relatively speaking. In the prior … Continued
Margin debt has diverged from US stocks – or not. It depends if margin debt is pitted against large- or small-caps. The former shows divergence, the latter not. Historically, FINRA margin debt tends to move hand in hand with US … Continued
US reliance on debt is growing. Having already just about used up the conventional monetary tool and a massive balance sheet, the Fed is looking for new tools – a la Japan. Stocks’ reaction function to Japanification is key. At … Continued
Foreigners, who had been cutting exposure for a while, have been warming up to U.S. stocks of late. Bulls obviously would like this to continue. Historically, foreigners’ activity and the S&P 500 have shown a tendency to move in tandem. … Continued