Has Equity Positioning Peaked? (It Depends)
If the question is whether there's room for market participants to increase their equity exposure with stocks at record highs, the answer is "it depends."
Specifically, it depends on which market participants you mean.
I often mention how the vol control universe can provide a kind of "background" bid for stocks as long as spot remains well-behaved and realized vol grinds lower (figure below).
That's still true. And, more generally, systematic strats still have room to re-leverage.
But, ac
How much cash is “on the sidelines”? If more of that comes in, and some is allocated to equities, then total equity allocation could decline in percent while rising in dollars.
Potentially after we all “sell in May and go away”, that is.
Buying the dip days may be winding down.