Inside Markets — Pain Trade Skewed Higher

The pain trade is clearly skewed to the upside with sidelined cash at all-time highs, equity sentiment at bearish extremes and hedge fund net equity exposure in the eighth percentile. Positioning data suggests the sell-off in U.S. equities has been largely driven by broad de-risking from hedge funds and systematic funds (CTAs), while the corporate buyback window has been closed. That changes next week when ~30% of S&P 500 companies can resume buybacks. Btw, the only high-frequency data we can find on non-US domiciled equity activity comes from ETF flows where foreign investors were net buyers of equity ETFs in April (though 4/18).