FAST FIVE: JPMorgan Spots Another Market Paradox: If Everyone Is 'All-In', Why Is The Market "Trading Short"?

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In fact, economic releases have been overall better than expected, with the bank's Economic Activity Surprise Index rising sharply YTD to the highest level since January 2018.

The answer is “probably not”, and in his explanation why that is not the case, Panigirtzoglou writes that a visual inspection of Figure 3 suggests that the vulnerability of equity markets tends to show up belatedly in this indicator, which tends to spike (thus pointing to elevated positioning) only after a correction arises.

But ahead of each one of these five major corrections JPM's indicator was negative or low, giving the impression that equity market positioning was low.

It simply says that in a rising market, equity investors typically find themselves shorter equities than desired, but once a correction arises, investors quickly find themselves much longer equities than desired, exposing the vulnerability of the equity market.

By contrast, in an environment where investors are long duration, the opposite should be happening, i.e.

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