US stock rebound 2022/07/19

Grandpa says, “Many respondents in the Bank of America Securities institutional investor survey have reportedly ‘raised the white flag’ in surrender, so bargain hunters have flooded into the stock market. This is the reason for today’s rise. → As a buying reason, it’s weak, isn’t it?”https://t.co/qUQZqzXoVi” / Twitter

I share the same view.

When I was active, I participated in the “BofA (Merrill Lynch) Securities institutional investor survey.” The perk of participating was that you would know the results the day before they were publicly released.

This time, the positions in US stocks among hedge funds and other speculative investors were heavily short. A partial short squeeze likely occurred. How far will this reversal continue?

Not only in stocks, but in forex and bond markets as well, short-term excessive movements are being corrected. It seems this also happened in stocks. I think it’s only a short-term adjustment.

For about ten years or so, speculative funds have mostly built stock positions not in futures but by shorting ETFs such as SPDR S&P 500 ETF. Therefore, it would be better to look at the short position of the S&P 500 ETF, but obtaining that data seems difficult. If paid, it could be obtained from IHS Markit. Also, you can create it yourself using Bloomberg Pro data (that’s what I did).