Citi analysts said in a note Tuesday that the current positioning activity in US equity markets reflects the ongoing uncertainty.
In their equity markets positioning model note, the analysts stated that while US equities ended last week strongly, "futures and ETF positioning was indicative of less conviction with positioning marginally shifting."
"S&P and Nasdaq are net long, but neither position nor profits are currently extended, limiting risks of unwind/profit taking," they wrote.
"On a normalized basis, though positioning is very similar to the week before, with Nasdaq less bullish relative to S&P, neither are currently extended nor has there been increases in positioning momentum," the analysts added.
However, they noted there has been a sharp rise in Nasdaq ETF flows seen over the week, although net profit/loss levels on futures positions remain small, "leaving limited positioning risks from potential forced covering or profit taking."
Switching the focus elsewhere, the analysts explained that European investor activity continues to decline, with most markets positioned near neutral, while the ASX 200 remains bullish and is currently "the most extended of the markets" that Citi tracks, with long positioning continuing to develop. Meanwhile, positioning momentum for the Nikkei "appears to be fading."