Tuesday, September 21, 2010

Flash Crash is going to feel like a Slap on the Wrist.. When this is Finished $SPX $SPY $NDX

According to TrimTabs Investment Research (www.trimtabs.com), leveraged short US equity ETFs have issued 2.8% of assets over the last week and 5.7% over the last two weeks.
Long/short hedge funds have reduced market exposure to about 18% net long vs. the historical average net long market position of 35-40%. A risk to our call for a deeper market correction is that long/short hedge funds increase their market exposure back to the historical average. In our view, this would support the market and reduce the risk of a deeper correction.
Macros Exposure Analysis Macro hedge funds were down 0.56% last week and are down 1.1% quarter-
todate. Based on our exposure analysis, macros are reducing their US Dollar long position and noticeably covered their commodities short. In equities, macros slighted increased their short positions in S&P 500 and NASDAQ 100 and tilted further to small caps. Macros continued to add to their net short in US 10-year T-notes. Macros do not have any crowded net long or net short positions in these markets.
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