There's Still A Lot Of Stock Longs At Risk Of Getting Shaken Out

There's Still A Lot Of Stock Longs At Risk Of Getting Shaken Out

BY TYLER DURDEN MONDAY, JUL 27, 2026 - 05:30 PM Authored by Simon White, Bloomberg macro strategist, Positioning and leverage in US equity markets remains elevated, amplifying risks of a deeper drop if selling gathers pace. Lower yields have given a short-term reprieve to stocks, but the market has been unable to rekindle the uptrend that ended at the beginning of June. Stocks have chopped sideways since then, and remain about 2%-3% off their highs. Liquidity is being squeezed and rates are tightening. The Federal Reserve meeting on Wednesday is very much live, with rates futures assigning about a 30%-35% chance of a hike.

But that has not stopped the net long of speculators across US stock indices continuing to rise, based on Commitment of Traders’ snapshot of positioning as of last Tuesday.

This tallies with a hedge fund positioning proxy, which looks at the sensitivity of macro funds’ returns to returns in the S&P. It reached five-year highs last week and is only slightly lower since then. (Of course, this measure means funds could be also be positioning in instruments that are themselves correlated with the S&P, but Occam’s Razor would suggest it’s more likely it’s stocks that they are getting more exposed to.)

Furthermore, the leverage in stocks that banks are offering to the market – mainly hedge funds and leveraged ETFs – remains near its highs.