Signaling an “Attractive” Set-Up
US stocks could bounce a bit
The JPM positioning intelligence team that spends their time analyzing flow & positioning data from their prime brokerage business says that we now entered into a short-term attractive set-up and that US stocks could bounce a bit.
Hedge funds dipping their toes
"The intraday bounces in US stocks have coincided with buying by HFs (+1z on Mon and Tues), most of which has come from longs added though shorts were also covered on Tues (though the overall effect was gross added despite unwinds in Momentum and crowded stocks). This follows a period of selling that started in late 2025 and strong de-grossing in 1H Feb, so those prior flows might have allowed HFs to step in and buy the past 2 days."
Source: JPM PI
Retail Army toe-dipping too
"US Retail investors have been buyers (based on JPM QDS updates) though mostly via ETFs as single-stock flows flipped to selling on Tues after they were bought on Mon." (JPM PI)
CTAs not significant sellers
JPM PI: "CTA positioning dipped a little in the US early this week, but didn’t change much given it had already come down in prior weeks towards a more average level."
Chart shows GS data on how CTAs have already reduced equity exposure.
Source: GS trading desk
"Attractive set-up"
"The reduction in risk over the past few weeks, alongside the recent moves, has caused our US Tactical Positioning Monitor to signal an “attractive” set-up (i.e., US stocks could bounce a bit). Notably, this is mostly due to changes in prior weeks as the 4wk change now sits at -1.7z on a 3d avg basis, below the -1.5z threshold, even though the 1wk change is less negative at -1.4z"
Source: JPM PI
Back to late November levels
"Positioning levels appear to be back around where they were in late Nov ’25 with it at the 42nd %-tile since 2015"
Source: JPM PI
Below 0
"On a 1yr lookback, positioning dipped below 0 again and, when looking at the past 3 years, it has only dipped much lower in Mar-Apr ’25"
Source: JPM PI
HF performance
HF performance took a dip early this month with All Strategies down 1.9% globally. The losses have been broad based across regions with L-S spreads roughly flat to slightly negative in most regions and strategies – i.e., some alpha pain, but not that extreme overall.
Source: JPM Prime Brokerage
Always a caveat
The positioning team at JPM concludes with the following:
"Given the situation remains very fluid and the initial reaction in the US has been to hedge previously and then BTD tentatively in stocks over the past 2 days, it’s possible that any rebound we get in the next week or two proves fleeting if the situation worsens. There is some precedent for this in that we saw a similar shift in early Mar ’25 where the 4wk change triggered an initial attractive set-up, but then triggered it again with a much more negative change in early April. Or looking back to 2023, there was an attractive set-up in mid-late Aug ’23, but then positioning dipped again into late Oct".
