According to Citigroup (NYSE:C) strategists, there has been a notable shift in sentiment in August and September, transitioning from peak bullish stock positioning to increasingly net short futures positioning.
This shift is indicative of a growing bearish sentiment on a global scale. Citi analysts point out that positioning in the Nasdaq market has now become one-sided and net short.
However, despite the extended selloff, the net positioning across all markets is not considered excessively extended. Additionally, profits and losses related to this shift in positioning have not been very significant.
“This leaves positioning relatively light and generally reflecting the apparent bearish sentiment globally,” the analysts wrote in a client note.
“S&P 500 is modestly net short (-0.9 normalized) after switching to negative in the past week. However, significant amounts of long positions still remain, and ETFs have had inflows, so the indication is not as bearish as for Nasdaq.”
Elsewhere, the Eurostoxx 50 stands out with the most bearish net positioning. Nevertheless, recent momentum in this market has been relatively sideways, indicating a degree of uncertainty and a lack of strong directional movement.