$80 Billion in Hedge Fund Selling Is About to Hit Markets

CTAs: Trend-following Hedge Funds that trade purely on momentum—have already sold $6.25B this year. If SPX breaks one more level, the real selling begins

"Don't let yourself get attached to anything you are not willing to walk out on in 30 seconds flat if you feel the heat around the corner." — Neil McCauley, Heat (1995)

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The Setup

Goldman Sachs just flagged something critical: CTAs are set to sell $1.5-2B of US equities over the next week. But that’s not the real story.

The real story is what happens if SPX breaks 110 points lower from here — roughly 6,720 — unlocking up to $80 billion in systematic selling over the following month.

CTAs have already dumped $6.25B since January 1st. This isn’t speculation. This is mechanical flow.