Posted 12/5/2023, 2:41:00 PM
CTAs Poised to Unload Over $200B in Stocks if Prices Slip After Massive Buying Spree
- Trend-following funds bought $225B in stocks over past month and are poised to sell if prices slip, potentially unloading over $200B
- These funds, known as CTAs, trade futures tied to equities, Treasuries, currencies and commodities
- CTAs have room to buy another $58B if rally continues, but more vulnerable to selloff due to high exposure
- Goldman analyst warned the "everything rally" in November that drew in CTAs "has absolutely run out of gas"
- With CTAs tapped out, any stock market pullback could quickly accelerate as they reflexively sell to cut exposure