The last time I looked at the positioning of Commodity Trading Advisors (CTAs), I both saved and made a lot of money by going risk-off and buying back at lower prices. Let’s look at what they’re up to now, as well as corporate buyback activity, and the performance of equity long/short strategies
CTA Positioning and Market Impact
Commodity Trading Advisors (CTAs) are currently positioned with a substantial short exposure of -$10 billion in global equities. This position is in the 40th percentile, reflecting a conservative stance following a significant sell-off of $159 billion in equities last month. However, there is potential for significant buying activity in the coming week. In the event of a flat market tape, CTAs are projected to inject $85.6 billion into global equities, with $29.2 billion of this entering the US market. If the market trends upwards, the buying could increase to $89.7 billion globally, including $28.8 billion in the US. Even in a downward scenario, there is an expectation of $54.2 billion in global equity purchases, with $24.3 billion of that directed towards the US.
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