Inside Markets — Equity Positioning

CTA equity positioning has returned to neutral levels (50th percentile as of last Friday) after reaching the 99th percentile in late October. The eventual unwinding of full equity positioning by trend following CTAs was a source of concern that has seemingly been neutralized without a lasting spike in implied volatility as the VIX Index has reset to the mid-teens. Broad equity positioning (across all groups) is also back to neutral levels after falling throughout November.  Since April, similar dips in positioning and volatility resets have been followed by periods of outperformance.  Volatility is key and sustained VIX levels >22 would change the near-term technical outlook.