Back in April, with sentiment was apocalyptic and hedge funds were shorting stocks in record amounts, we bottomed just around the time CTAs and other systematic funds went 100% net short and - as we reported at the time - started to buy, either as a result of VIX resetting or because stocks rose above key CTA thresholds. This was the bottom.
SPX rises above first CTA buy trigger:
— zerohedge (@zerohedge) April 24, 2025
Short term: 5595
Med term: 5775
Long term: 5479
if it closes here, we start seeing cascade of chasing higher.
Fast forward 6 weeks, with the S&P having erased all their post Liberation Day losses, and in fact rapidly approaching 6,000, and CTAs are now on the other side of the table. As Goldman's Cullen Morgan writes (note available to pro subscribers), that after buying $103bn of global equities last month, CTAs are now sellers in every scenario globally and in the US over the next week, where Goldman has this cohort long $17.5bn of US equities.
