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- "Our CTA model estimates aggregate US equity positioning at -3.3 standard deviations"
"Our CTA model estimates aggregate US equity positioning at -3.3 standard deviations"
DC Lite #714
Welcome back to DC Lite: Daily Chartbook’s free, entry-level newsletter containing 5 of the day’s best charts & insights.
1. ADP employment. Private business added 86k jobs in October, matching September's total, with firms of all sizes seeing gains for the second month in a row.
2. Oil prices. "Some serious moves in oil ... Brent crude is down by 19.6% in the past three days. We haven't seen a move like that since April 2020"
3. CTAs vs. US equities. "Our CTA model estimates aggregate US equity positioning at -3.3 standard deviations, in the sub-2nd percentile of its one-year range, in the 10th percentile of its history since 2018, and the lowest since March 31. Positioning has fallen from +1.7σ three months ago to -1.0σ one month ago, with CTAs now short for 26 consecutive sessions."
4. Sector breadth. Nine sectors have at least 70% of members above the 20DMA. Energy (5%) and Tech (29%) are the exceptions.
5. Energy vs. Tech. "Perhaps the most striking illustration of this year's dispersion: as of October 28, when Energy and Tech were the top two best sector performers within the S&P 500, the correlation between them was negative. That is the first negative reading in Ned Davis Research's data going back to at least 1973."
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