Positioning Weekly: real trading vs. “entertainment”

Apophenia: the tendency to perceive patterns, connections, or meaningful links between unrelated or random phenomena. A well-known example of apophenia is seeing shapes in clouds or interpreting random fluctuations in financial markets as predictive signals.

WHERE IS THE STREET MOST OFFSIDES TODAY?

• Offsides LONG (or least short):

  • Grains (wheat, corn, soybean oil)

  • AUD and emerging market FX (ZAR, and BRL)

  • Metals (gold, platinum, palladium) …

  • Sugar

  • Ag

• Offsides SHORT (or least long):

  • 2s, 5s, and 10s

  • MXN, USD, Bitcoin

  • Energy (excluding RBOB)

Key weekly observations:

• EEM saw weekly net selling after 2 heavy buying weeks (china stim, positioning barely entered lower quartile)

• Bonds remain offsides short (excluding Long Bond)

• RBOB ramped from offsides short a few weeks ago and has now entered into the upper quartile

full matrix below

(for positioning, i tightened up my lookback period to 6mo -from 12mo - vs previous posts)

WEEKLY OBSERVATION DECK:

MARKET POSITIONING MATRIX, PERFORMANCE, CORRELATIONS: