By looking at the rolling betas of daily hedge fund returns to global equities, it appears that HF exposures to equities have increased further and are now at or close to the most bullish levels of the past two years.
I have no idea what a rolling beta is, but if this analyst is correct than I believe it is a very big negative for the market. I believe that hedge funds have fueled the rally that started in early September. Mutual funds actually decreased cash positions this Summer so it certainly was not them fueling the buying.– Nikolaos Panigirtzoglou, JP Morgan
No group turned as bearish as hedge funds this Summer as "de-risk" was the buzz word. Their reversal of this bearish position has been the largest source of demand for this market.