With Market Approaching All-Time Highs, JPMorgan Says CTAs / Short Squeeze Can Push Stocks Higher

Coming off a string of predicting the risk parity and volatility targeting would lead to further selling in August, JPMorgan notes October’s rapid rise price was due in part to managed futures CTA capitulation. While all four segments of the fund community are generally exposed to long equity positions, the stock market could be further propelled by a large derivatives net short position that could unwind with further price action to the upside. Considering the past history of the bank’s derivatives analysis, the October 30 note points to one last gasp of oxygen left for stock market bulls. JPMorgan’s history…