PM. Macro, long/short equity & credit. Not advice.
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Notwithstanding Retail's recent behavioral shifts, positioning remains very full. We have seen nothing resembling capitulation.
Both Citadel and JPM noting a change in the behavior of Retail over the past month...
"Today’s relief rally brings confirmation that the shift in retail behavior that we have observed over the past month is persisting: retail moved from ‘buying the dip’ (e.g. this time last year), to now skipping the dips, selling into rallies, and positioning more defensively, report. Overall, retail activity remained extremely subdued this week, driven by net selling in single stocks and weak ETF purchases. Even more so today, despite oil posting its largest decline since 2020 and VIX breaking below 20, intraday retail flows showed no signs of strengthening." (JPM)
"The most notable change has been a decisive rotation into puts. Over the past two weeks, total retail put activity has surged to the 99th percentile relative to all other 10-day trading periods since the start of 2020. Call activity has simultaneously fallen into the 70th percentile (in just the 13th percentile versus the past 1 year). This divergence culminated in a rare inflection point on April 2nd, when more puts than calls were traded by retail at Citadel Securities – only the sixth such occurrence in the history of our platform." (Citadel)
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With oil stubbornly below $100, the energy specialists of '26 are increasingly looking like the freight experts of '25...
In '20, many saw Covid coming but ignored... and lived to regret.
In '25, freight "experts" warn of out-of-stocks... and proved to be bullsh*t.
In '26, energy specialists warn of $150 oil... Feels like everyone is anchored to the '25 experience and forgot '20. Not sure...
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Both Citadel and JPM noting a change in the behavior of Retail over the past month...
"Today’s relief rally brings confirmation that the shift in retail behavior that we have observed over the past month is persisting: retail moved from ‘buying the dip’ (e.g. this time last year), to now skipping the dips, selling into rallies, and positioning more defensively, report. Overall, retail activity remained extremely subdued this week, driven by net selling in single stocks and weak ETF purchases. Even more so today, despite oil posting its largest decline since 2020 and VIX breaking below 20, intraday retail flows showed no signs of strengthening." (JPM)
"The most notable change has been a decisive rotation into puts. Over the past two weeks, total retail put activity has surged to the 99th percentile relative to all other 10-day trading periods since the start of 2020. Call activity has simultaneously fallen into the 70th percentile (in just the 13th percentile versus the past 1 year). This divergence culminated in a rare inflection point on April 2nd, when more puts than calls were traded by retail at Citadel Securities – only the sixth such occurrence in the history of our platform." (Citadel)
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He did it with Iran, like he did with the trade war. Shocked by how comatose the market has become... it's oil too.
Does anyone have a rational thesis why risks should no longer be priced?
Regarding tariffs, Trump's on-again/off-again Truths cycle successfully numbed investors to the topic altogether.
Wonder if the same is being attempted re Iran...
Problem is: the tangible impact of disrupted SoH is far more consequential than tariffs.
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"Trump announces the U.S. will work with Iran to dig up and remove buried nuclear material."
Any good things about this admin are eclipsed by its grift and its gaslighting. Watching the market moved by his bullsh*t is the most frustrating thing about investing in the Trump era.
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Iran content to drag us into a quagmire.
Israel hellbent on destroying Iran.
Trump needed a short-term off ramp, given they called his bluff.
Which one of these will drive for a durable pause?
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The market has been in a bizarre holding pattern since Thurs... seems to be saying the parade of hawkishness doesn't matter. Or we're sleepwalking into a crisis.
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Best measures of positioning still neutral to full. No signs of capitulation at any point ytd.
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weird day… market working hard to embarrass the max number of people. my read: at this point in the selloff, there’s not much info in the px action. bear mkt bounce similar to 2022 and last year. new lows coming
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Huge numbers will be the norm going forward, as a result of the gates. You ask for everything back to ensure you get your pro rata. The contagion mechanism is the publicly traded debt these investors hold elsewhere in their portfolios - and the eventual default cycle.
BLUE OWL CREDIT INCOME FUND RECEIVED WITHDRAWAL REQUESTS ESTIMATED AT 21.9% OF THE FUND SHARES IN Q1
BLUE OWL OTIC FUND RECEIVED WITHDRAWAL REQUESTS ESTIMATED AT 40.7% OF THE FUND SHARES IN Q1
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Trump has been saying "two to three weeks" for the last four weeks -- and he has been saying "they want a deal" every day since before the war started. There is no off-ramp... there's just retreat. And retreat is not an option.
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Max Rockatansky retweeted
3) “Honor the dead by completing the mission”
This is the key line.
That framing:
--Locks in political commitment
--Raises the cost of stopping early
Classic mechanism:
Casualties → moral obligation → longer war
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This was a "buy fewer dolls for your kids" speech. Suck it up and take it. The idea of active negotiations is 100% blowing smoke... anyone who truly believes they're talking is delusional. Magnitude of market impact is unknowable, but Hormuz is closed for business indefinitely.
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They're saying the same thing, again and again each day.
The fact that SPX is up otd doesn't make their propaganda more true. In fact, it emboldens them to war moar.
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