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Nearly all shorts offside leads to near-term squeeze risk - Citi

Published 07-03-2023, 06:44 pm
© Reuters.
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By Sam Boughedda 

Citi analysts told investors in his equity markets positioning note Tuesday that futures positioning is drifting as the market rebounds.

They explained that global markets "ended the week stronger," but futures positioning flows didn't reflect the same optimism.

"S&P 500 long positioning rose, but is only slightly up over the week and marginally bullish. Nasdaq and EuroStoxx saw a continuation of declines in net notional, with the former bearish and moderately extended," they wrote.

On US equities, the analysts said, "S&P 500 bullish positioning edged higher, but weekly notional changes were relatively small, with positioning net long and marginally above long-term averages."

Meanwhile, Nasdaq bearish sentiment "continues to develop despite the underlying index finishing higher," while short positioning grew last week alongside ETF outflows.

"With nearly all shorts offside, and losses extending, there's an increasing risk of a near-term squeeze," the analysts declared.

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