Exactly one week ago, we warned that the bears "faced even more misery" after the just released bullish news of a US-China trade war truce, due to the record liquidation in the "other" S&P futures category. Specifically, we reported that with respect to Other, longs fell -$10.8bn. Thus dating back April 8th, "Other" longs decreased in 3 of 4 reports for a cumulative -$35.6bn. Historically, this stretch had been rivaled by only 1 instance during COVID, and indicated that sentiment remained very much bearish, and the result would be a continued short squeeze higher.
Fast forward to this weekend when on the back of this week’s impressive +5% gain, the S&P 500 has now finished up 1% ytd. Putting that in context, the S&P is +19.5% from the April Tariffs Announcement lows, which means it’s only 50bps from a “bull market” off those levels. It's worth noting that S&P avoided bear market territory dropping 18.95% from peak to trough.
