Computer-driven traders are bullish on stocks, humans are bears

This computer traders have not been upward on stock compared to their human counterparts since early 2020, before the depths of the Covid’s pandemic, according to the Tatte Bage, a strategy in Deutsche Bank Ag.

The two groups look at different signs to form their opinions, so it is not shocking to see the market differently. While computer -based Quants that use systematic strategies based on momentum and volatility signals, estimated money managers are individuals looking in economic trends and profits to direct their movements.

However, this degree of disagreement is rare – historically, not long.

He said: “Estimated investors are waiting for something, whether it slows down growth or an increase in inflation in the second half of the year of definitions.” “With the deterioration of data, their concerns will properly prove if the market is sold on growth concerns, or the economy will remain flexible, in which case, it is possible that estimated managers will start raising their exposure to shares on economic optimism.”

Wall Street has made a lot of confident predictions, but the reality is no one knows what will happen with president Donald Trump’s commercial agenda or federal reserve’s interest policy.

With the S& P 500 index that reaches over and over its highest level ever hit, professional investors are not committed to doing so. As of the week ending August 1, they reduced their exposure to shares from a modest weight loss to the long uncertainty surrounding global trade, corporate profits and economic growth, according to the data collected by Deutsche Bank.

“Nobody wants to buy shares with a snake already in the records, so some people pray for any sale as an excuse to buy,” said Frank Moncmoon, President of Macro Trading at Buffalo Bayou Commodities.

Hunt

However, the algorithm funds that follow trends chase this momentum. They have been seduced in a purchase spree after locating in the spring, they wiped the path to return in recent months as the S&P 500 gathered about 30 % of its lowest level in April. During the week ending on August 1, the long stock positions of the systematic strategies were the highest since January 2020, the Deutsche Bank program.

This difference supports the tension of the rope between the technical and basic forces, with the S&P 500 stuck in a narrow range after publishing the longest series of calm in two years in July.

CBOE-VIX-lying-VIX- which measures the implicit fluctuations of the future American stock futures through options outside funds, closed on 15.15 on Friday, near the lowest level since February. VVIX, which measures fluctuation, decreased for the third time in four weeks.

“The rubber bar can only extend before it settles,” said Colon Lauder, director of the alternative investment company for the alternative investment company in Kohalu. “So the possibility of selling average recovery is higher when there is a systematic congestion, as is the case now.”

This type of collective accumulation in trade occurs periodically with computer -dependent strategies. In early 2023, for example, QUANTS was loaded on American stocks following a 19 % decrease in S&P 500 in 2022, until fluctuations in March of that year increased during regional banking turmoil. In late 2019, fast money dealers operated the shares on the records after penetrating the commercial talks between Washington and Beijing.

This time, however, you expect that the division between a man and a machine to the past weeks, not months. He said that if the estimated traders start selling in response to the weakest growth or softening the directions of corporate profits, which pushes the fluctuations up, it is possible that the strategies based on the computer will start relaxing on their sites as well.

In addition, it is possible that the highly exposed investors in the American stocks by September, which may lead them to sell the shares because they are vulnerable to negative market shocks, according to Scott Robner of Citadel Securities.

CTA risk

Lauder said that, given how the systematic funds work, the sale of the commodity trade consultants, CTAS, and relaxation in severe locations, may start selling to the commodity trading consultants, and relaxing in severe locations. He added that this would increase the risk of severe repercussions in the stock market, although it will need a significant sale to rise in volatility to the past.

CTAS, who were buying in stocks, is $ 50 billion in American stocks, and placed in the 92th centenary of historical exposure, according to Goldman Sachs Group Inc. However, the S& P 500 index will need to violate 6,100, which reduces annoying research in the MASIVIST AG group.

So the question is, while placing a quantitative position on this upscale aspect and building pressure in the stock market due to the severe levels of uncertainty, can any gathering from here really last?

“Things have started to feel hair,” Grinacoff said, adding that the bullish trend of stocks “is likely to exhaust” the short term given that the location of the CTA is near the maximum. “This is a little worrying, but it has not yet raised the alarm bells.”

What’s more, it is possible that any systematic retreat will create an opportunity for appreciation asset managers who have lost this year to re -enter the market as buyers, and make diving more severe, according to Kohalu Ludder.

“Whatever raises the following clouds is a mystery,” he said. “But when this happens in the end, exposure to the manager assets and estimated sites is so light that it will add fuel to the” purchase “mentality and prevent greater sale.