S&P 500 (INDEXSP:.INX) experienced booming returns in January; unfortunatyely, the same cannot be said for hedge funds. Through the first month of the new year, hedge funds returned 1.74 percent on average according to BAML’s Hedge fund montior. The performance lags the return on S&P 500 (INDEXSP:.INX) by a fairly large margin which rose 5.04 percent over the same period. However the figures look more decent if performance is taken by strategy, Event Driven and Equity Long/Short funds rose 3.27 and 2.31 percent respectively. Macro and Managed Futures underperformed with -0.07 and -0.47 percent each.
The highlight of last week’s readings of CFTC futures is the entry of Gold into the Buy zone, an event that has been strongly predicted by the contratrion bullish signals of the past few weeks. While in the Buy zone, large speculators sold Gold to $21.1 billion from $25.7 billion in the week ending on Jan 29. The readings moved into the Buy zone for the first time since August 2012.
More buying in Platinum and Palladium futures moved both metals into the crowded long zone. Buying in the Russell 2000 futures has been consistently breaking records, the readings are now the highest ever. Agriculture commondities were pressured as large speculators exited their extreme long positions. Wheat reversed the strong signs of its approach into a crowded short-zone in last week as hedge funds reduced their shorts. In the past three weeks large specs have been covering their shorts in yen; however, this time they added to their shorts to $9.8 billion from 9.0 billion notional. Large specs also sold 10 yr notes to -37 percent from the previous week.
The overview of what trends were prevalent among hedgers in the week ending on Jan 29 are as follows:
Buy: S&P 500 (S&P Indices:.INX), NASDAQ-100 (INDEXNASDAQ:NDX), Russell 2000, Soybean, Corn, Silver, Platinum, Palladium, Crude Oil, Heating Oil, Gasoline, Euro, USD
Net Long: All Metals, Heating Oil, Gasoline, USD, Euro, 10 yr notes, 2 yr notes
Crowded Net Long: Platinum, Palladium, Crude oil
Sell: Gold, 10 yr notes, 2 yr notes
Net Short: Natural Gas, Yen, Wheat, 30 yr Notes