NEW YORK: Here’s what happened during the rebound in equities that added nearly $3 trillion to US share values in 10 weeks: mutual funds hoarded cash, short sellers tightened their grip on bearish bets and individuals bailed out of the market.
The divergence between sentiment and prices has been so wide that 2016 is shaping up as the “Year of the Wrong-Way Trade,” beginning with hedge funds that lost the most money in four years betting on momentum stocks. As the S&P 500 soared 15% since Feb 11, investors have all but stopped trading: volume is down 20% since the index bottomed.
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