As part of my framework, I am closely watching for regime shifts in the “Positioning Window” (are we in an environment where utilizing positioning is working vs not working). Trend has had an exceptional past 12mo as noted in previous observations on The Macro Desk (the OPI is negatively correlated based on my White Paper findings). I see the possible beginnings of a shift. Right now, the OPI (Offsides Positioning Index) is in all the right things (long Nasdaq, EEM and Long Bond, Short USD, Long Metals, short Energy and the Grains – full OPI constituents are available in the weekly deck). I am agnostic and Positioning is my North Star, but it is/has been very “Risk-On”.
Optimal Risk-ON: Nasdaq & EEM, Long-Bond, DM FX (eur, chf, jpy), Gold & Silver, Cocoa
Optimal Risk-OFF: 5s, USD, AUD, Copper, Energy, Grains, Cotton, Live Cattle
