This chart from today's Early Look by Josh Steiner shows how extremely one-sided positioning can be a recipe for drastic turning points.
In late 2021, investors were extraordinarily bearish going into a significant slowdown. Late 2022 was a mirror image, as bearish positioning preceded a period of growth.
Today, net long positioning in Nasdaq futures is currently at the 96th percentile of its trailing 3-year range, while net long positioning in Dow futures sits at the 99th percentile. Herein lies the opportunity for the catalyst of slowing growth to meet the fuel of extreme one-sided bullish positioning.
This is one of 160+ slides in Tuesday's Q1 2024 Macro Themes presentation. To upgrade your subscription to Macro Pro and receive access to the full slide deck, email support@hedgeye.com.
