Equity Markets Positioning Model: Positioning Eases but Vulnerabilities Remain

Research evidence excerpt

Equity Markets Positioning Model: Positioning Eases but Vulnerabilities Remain

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20 Jul 2026 20:54:09 ET │ 38 pages

Equity Markets Positioning Model

Positioning Eases but Vulnerabilities Remain

CITI'S TAKE

Europe

The recent technology-led selloff triggered a deterioration in positioning

across most major equity markets, with long unwinds, new shorts and rising David T Chew AC

unrealised losses driving flows. The sharpest adjustment occurred in +44-20-7986-7698

Nasdaq, where positioning reset lower but remains vulnerable given all david.chew@citi.com

longs are currently in loss. European investors continued to reduce risk

through profit-taking and new shorts, pushing DAX into bearish territory

and increasing squeeze potential should sentiment improve. In Asia, US

bearish flows were widespread, although KOSPI remains the market most

exposed to further deleveraging. Here, positioning remains elevated despite Richard W Schlatter

the recent index decline. Looking ahead, upcoming earnings will be key in +1-212-816-0591

determining whether positioning stabilises or unwinds further. richard.w.schlatter@citi.com

Anju BhandariUS – Positioning reset underway, but the unwind may not be over — US

positioning deteriorated sharply as the recent AI and technology selloff triggered +1-212-816-3812

widespread de-risking, with flows overwhelmingly bearish across large caps. S&P anju.bhandari@citi.com

positioning eased primarily through long unwinds, while Nasdaq positioning saw a

more aggressive combination of long liquidation and new short flows, leaving

positioning at a one-month low. The key positioning risk remains concentrated in Asia-Pacific

Nasdaq, predominantly, for longs which are now entirely in loss and positioning

levels which are still elevated. Yue Hin Pong