(Bloomberg) — The VIX is at 20, stocks are on the brink of their worst October in five years, and every other day the bond market throws a fit.
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For equity bulls conditioned to dive in at any sign of weakness, it’s getting to be too much. Across investor categories, they’re pulling money out and hardening a posture that is by some measures the most defensive in over a year.
Surveys of professional managers show big-money allocators have cut their equities to levels last seen at the depths of the 2022 bear market. Hedge funds just pushed up single-stock shorts for an 11th straight week. Models of investor positioning show everyone from mutual funds to systematic quants reducing equity exposure well below long-term averages.
Among trading sins, few are as unanimously pilloried as market timing, but that doesn’t keep it from happening in times of stress….
