Is a turning point for the US stock market approaching? Goldman Sachs traders: Systematic deleveraging is nearing its end
Goldman Sachs trader Scott Rubner pointed out that currently CTAs have shorted $30 billion of U.S. stocks. Assuming the current short squeeze continues and the U.S. stock market experiences a +2 standard deviation increase in the next month, then CTAs may need to buy over $45 billion of the S&P 500
Recently, Goldman Sachs trader Scott Rubner pointed out in a report that the U.S. stock market may be at "the top of the 9th" stage of the market cycle, and that "systemic tail risk" is now upward, meaning systemic factors may drive the U.S. stock market to experience significant upward movement.
"The top of the 9th" comes from baseball terminology, usually referring to the last inning of a game. In financial market analysis, this metaphor is often used to describe a trend in the market that is nearing its end, approaching a critical turning point or moment, where risks and variables are increasing, and significant changes or reversals may occur.
Rubner stated that currently, CTAs have shorted $30 billion in U.S. stocks, whereas a few weeks ago they were long $50 billion.
Therefore, assuming the current short squeeze continues, and the U.S. stock market experiences a +2 standard deviation increase in the next month, according to Goldman Sachs' model, CTAs may need to purchase over $45 billion in S&P 500 index stocks, and globally, CTAs may need to buy over $92 billion in stocks.
Rubner wrote in the report:
"This is the largest one-month forward demand we have seen since November 13, 2023."