CTAs Go Long on U.S. Stocks, Neutral in Europe and Japan: BofA

Bank of America analysts indicated that Commodity Trading Advisors (CTAs) continue to maintain their long positions in U.S. equity indices despite recent declines observed in the S&P 500 and Russell 2000. According to the bank's model, there has been little change in CTAs' positions in U.S. stocks compared to the previous week. In contrast, a shift has been observed in European equities, with CTAs closing more of their short positions in the EURO STOXX 50. The index has experienced a remarkable upward trend, posting gains in 11 of the last 12 trading days, bringing CTAs closer to a neutral position.

The situation in Japan presents a different picture. CTAs' long positions in the Nikkei-225 remain at neutral levels. However, there is potential for increased buying activity from trend followers if the index experiences an upward breakout. As the year-end approaches, Bank of America anticipates that CTAs could restore their long positions to levels seen in July. This move may aim to capitalize on the typically lower trading volumes and decreasing volatility that characterize the year-end period.