Original title: short positions are still high, beware of retail investors forcing the air to break out again
AlthoughGame station(GME) shares have "fallen" a lot from their previous highsHowever, the overall short position of the most heavily shorted basket of stocks has not decreased significantlyThe short positions of most short sellers are still high.
Goldman Sachs GroupWarn thatCheques issued by the next round of fiscal stimulus are likely to create a new round of emptying:
Because US households are flush with cash, the retail investment boom that drives such market activity is likely to continue. We expect that the cash balance of US households will only increase in the coming months as the US government pushes ahead with a new round of fiscal stimulus. "
After last week's extreme volatility, the situation for hedge funds has eased in recent days. Stocks such as GME fell sharply, causing many funds to make up for January's losses. Trading activity is returning to normal as hedge funds re-increase their overall exposure.
However,This does not mean that there will be no more fluctuations in the next two to four weeks, because the follow-up impact of this forced-to-air incident is still quite large, and it is not completely over.
The market ear pointed out thatHedge funds are regaining their positions in high-priced silver stocks.
Net short positions in high-priced US silver stocks increased earlier this week, although this only partially covered the short positions that fell at the end of January, but it suggests that the worst may be over.
The recent extreme price volatility in the stock market clearly poses a risk to the sustainability of the stock rally that has been massively shorted. This week, the exchange imposed trading restrictions on some stocks, and the prices of some stocks, including GME and AMC, fell sharply. "
In addition, despite the recent market turmoil,The net leverage ratio of hedge funds is still close to its peak.. The following figure showsJPMorgan Chase & CoTotal leverage ratio and net leverage ratio.
The market ear said investors should also pay attention to the VIX panic index. The VIX index has fluctuated extremely since the short-selling incident by retail investors.If something similar happens again, the VIX index could fluctuate extremely again.Now the VIX index has fallen, but it is still at a high level.The current VIX index is still too high for hedge funds.
The following figure shows the "structural pricing" of the Fed's balance sheet and implied volatility.The Fed has distorted a lot of asset prices, including pricing volatility.
Speculation in the US stock market may increase the likelihood of these risks. Analyst Jesse Felder saidThere are signs that speculation in the stock market is rampant today.
John Kenneth Galbraith said in "the Great Stock Market crash of 1929":
"even the most cautious investors would agree that the number of brokerage loans-that is, loans backed by securities bought on margin-is a good indicator of the degree of speculation."
Jesse Felder says that if you measure margin debt (as measured by the normalisation of the size of the economy), you will see how "rampant" speculation is now.
Not only has the overall level of margin trading reached a new high, but the total amount of margin trading has also reached a new high in the past nine months.
Jesse Felder representsInAt a time when the total amount of margin trading is already high, the debt used for speculation is still growing rapidly.It's hard to imagine these two things happening at the same time, but that's the way it is.
Jesse Felder warns thatHistorically, when margin debt soared, the stock market tended to peak.The exceptions were 1972, 2000 and 2007-1983, probably because valuations were very low and the total amount of margin debt was relatively small.
In addition,The bear market that followed the surge in margin debt was partly driven by the deleveraging process.This process has pushed the nine-month change in the number of margin trading to extreme levels.