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Investing.com -- Bank of America analysts reported that trend-following commodity trading advisors (CTAs) are maintaining significant short positions in crude oil, but potential short covering could occur soon. Their model predicts that covering might increase from 64.9 to 71.4 on the front crude oil futures.
In other commodities, CTAs are holding large long positions in gold and soybean oil, while maintaining shorts in soybean meal. Analysts noted that soybean oil longs could face pressure to unwind if prices move within the 46.1 to 43.9 range.
Currency positions reveal that CTAs are near maximum long positions in the euro, British pound, and Mexican peso against the U.S. dollar. However, these positions are not currently at risk unless the dollar experiences a sharp rally. Long positions in the Japanese yen and Canadian dollar are less stretched, while the Australian dollar shows mixed trends.
When it comes to equities, trend followers might be long on European equities, but positions vary depending on trend speed. Short to medium-term trend followers may have turned long on the S&P 500 and NASDAQ-100, while long-term models remain short. Conversely, the Russell 2000 is likely short in medium and long-term models.
In fixed income, CTAs are probably holding short positions in 10-year U.S. Treasury futures, though not in large quantities. The 30-year futures have a larger short position, but there is little immediate risk of short covering.
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