Hey, Ross here:
Hedge funds have spent the past few months taking a LOT of risk off the table.
But when I dug into where they’re actually moving the money…
One part of the market stuck out immediately.
Take a look:
Chart of the Day
This chart shows the three-month change in hedge fund gross leverage.
In plain English, it measures how aggressively funds are cutting the total amount of market exposure they’re carrying.
And this quarter, the drop has been huge.
Gross leverage is down roughly 7–8 percentage points from its recent peak.
That puts this de-leveraging episode in the same neighborhood as some of the biggest risk reductions we’ve seen since 2018.
So hedge funds have clearly gotten more defensive.
But here’s where it gets unusual:
This chart comes from Goldman’s prime brokerage data and tracks hedge fund buying in Technology and Communication Services.
Over the past two weeks, long buying in those sectors has surged to a little over 3% of gross market value.
That’s one of the strongest bursts of buying on this chart going back to 2022.
So at the same time hedge funds are cutting exposure across their books…
They’re aggressively adding money in one specific area.
That tells me something – which I explain in the insight below.
Insight of the Day
The “big money” is telling us what they still want badly enough to keep buying.
When funds are buying everything, it’s hard to tell how much conviction sits behind any one position.
Everybody’s taking risks.
Money is flowing everywhere.
But when those same funds start slashing exposure?
Now their choices get more revealing.
They’re actively deciding what they can live without…
And what they still want badly enough to keep buying.
That’s why the Tech and Communication Services flow above jumped out at me.
If hedge funds are cutting risk across the board but still piling into that part of the market…
I want to know which individual stocks are absorbing that money.
Because a giant fund can’t build a serious position in one shot.
They have to work the order.
And when enough money starts flowing into the same stock over days or weeks…
It leaves tracks.
Tracks we can follow – so we can use their money for our gain.
And in just a few hours later today at 11 a.m. Eastern…
I’m going LIVE to show you exactly how I do it.
I’ll break down the strategy I use to spot institutional footprints…
How I identify stocks where big money appears to be building a position…
And how smaller traders can potentially ride alongside that buying before the move is finished.
It’s the same approach that helped us identify opportunities like NuScale Power before a 146% move in 53 days… Alpine Immune Sciences before 206% in 77 days… and Nikola before 87% in just 24 hours.
Click here to lock in your free seat for today’s LIVE strategy session if you haven’t yet…
And I’ll see you in just a bit at 11 a.m. ET.
P.S. If you’re planning to attend on a mobile device, make sure you download the presentation app now so you don’t miss anything when it starts. See you there.
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