Could CTA funds return to buying stocks this week? $SPY $QQQ According to Goldman Sachs: CTA funds may reverse a significant portion of last week's sales.
Last week, the bank estimated that trend-following funds sold approximately $11.5 billion in global stocks, reducing their total long exposure to about $111 billion.
Now, the forecast has changed:
If the market behaves according to Goldman's base scenario, funds are expected to return to significant purchases and restore a large part of the exposure that was sold.
Forecast details for the coming days:
If the market remains stable, funds are expected to buy approximately $8.49 billion in stocks, of which about $2.26 billion will be in US stocks.
If the market continues to rise, the volume of purchases could increase to approximately $9.66 billion, including about $2.93 billion in the US market.
If the market falls, funds are expected to sell approximately $4.23 billion in stocks.
But there's a very important point here – most of the sales are expected to be outside the United States, totaling over $4 billion.
Goldman emphasizes that many technical indicators are still in a neutral zone.
Therefore, even small price movements can quickly change the direction of the funds' activity.
It appears that algo funds may join the positive trend in the markets – especially if we continue to receive positive earnings and macro updates that support the markets