Shallow Waters, Big Opportunity

What If Oil Falls Sharply?

According to Bloomberg, equity allocations are now heavily overweight, with the most crowded trades concentrated in AI-related mega-cap technology. What we are seeing today is essentially a continuation of last year’s most overcrowded positioning: long technology and short oil.

The Fear & Greed indicator reinforces this point. It shows that sentiment for the Philadelphia Semiconductor Index is at its highest level in the past 15 years. At the same time, oil bears appear firmly in control. Remarkably, as Bloomberg highlights, speculators are more bearish on oil today than they were during the 2020 COVID collapse.