Selling pressure on US equities is approaching historical extremes, but conditions for a rebound are quietly gathering.
Data from Goldman Sachs' Prime Brokerage desk shows that hedge funds have reduced their global equity holdings for six consecutive weeks. The scale of net selling ranks third in the past decade, nearing the peak levels seen during the COVID-19 crash. Meanwhile, Goldman Sachs analysts noted that trend-following systematic investors (CTAs) have sold approximately $190 billion in stocks over the past month. While they currently hold about $50 billion in net short positions in global equities, their selling momentum is nearing exhaustion.
Goldman Sachs believes these extreme positions are creating asymmetric upside for the market. The bank estimates that over the next month, regardless of market direction, CTAs will shift to net buying. Simultaneously, buying from pension fund end-of-quarter rebalancing is expected to enter the market, and approximately $7 billion in negative Gamma exposure from options market makers will dissipate as it expires at month-end, potentially easing multiple technical pressures at once.
<h2>Hedge Fund Selling Nears &#34;Capitulation&#34; Signal</h2>
In its weekly market data review for the week ending March 26, the Goldman Sachs Prime Brokerage team noted that the latest round of deleveraging by hedge funds was broad-based, with net selling occurring across all major regions. Notably, short exposure in macro products within the European market rose to 11%, a ten-year high.
In the US market, the Goldman Sachs team stated in a separate report that &#34;some signs of capitulation are starting to surface,&#34; suggesting that fund pessimism toward the market is nearing its limit. On a rolling six-week basis, net selling of US equities is the third-highest in the past decade, approaching levels seen during the COVID-19 sell-off, though still below the peak reached during the &#34;Liberation Day&#34; tariff shock in April 2025.
In terms of market performance, what was previously seen as a relatively mild pullback is deepening. The Nasdaq 100 Index has fallen more than 10% from its peak, officially entering technical correction territory, while the S&amp;P 500 is also nearing the same threshold. The STOXX Europe 600 has fallen nearly 9% since March, on track for its worst monthly performance in six years.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/2b09e961-f1f3-489b-99d3-201495cebee5.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/2b09e961-f1f3-489b-99d3-201495cebee5.png"/>
<h2>CTA Selling Pressure Nears Exhaustion; Asymmetric Rebound Potential Emerges</h2>
Positioning changes among systematic investors are another key variable in the current market. Goldman Sachs analyst Cullen Morgan noted that CTAs have sold a cumulative $190 billion over the past month and currently hold roughly $50 billion in net shorts globally, but their selling momentum is fading.
&#34;Systematic investors are running out of ammunition,&#34; Morgan wrote. &#34;The asymmetry points to the upside—we estimate that in any scenario over the next month, CTAs will become buyers.&#34;
Meanwhile, Goldman Sachs' models show that pension funds will be buyers of equities during their end-of-month and end-of-quarter rebalancing operations. Furthermore, approximately $7 billion in negative Gamma exposure held by options market makers will expire at month-end, meaning this technical factor that has persistently suppressed the market will automatically disappear. The convergence of these factors forms the basis for a potential short-term technical rebound.
<h2>Geopolitical Tensions Remain the Biggest Variable; Goldman Sachs Refrains from Calling a &#34;Bottom&#34;</h2>
Despite extreme technical signals, Goldman Sachs remains cautious internally about whether the market has bottomed. Brian Garrett of Goldman Sachs wrote in a client report, &#34;It feels like we are closer to the end than the beginning, but this game does not have 'innings' in the classic sense.&#34;
Garrett pointed out that no market participant can currently provide a clear timeline for the war involving Iran. De-escalation requires a consensus among multiple parties, a sign that is not yet evident.
&#34;While it is gratifying as a sell-side analyst to 'successfully call the bottom'—and many have already tried—honestly, we are not there yet,&#34; Garrett stated.
Goldman Sachs' overall assessment is that extreme positioning and the dissipation of technical pressures provide asymmetric upside for the market, but a true trend reversal still depends on a material de-escalation of geopolitical tensions.
Risk Warning and Disclaimer
Markets carry risks, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their specific circumstances. Any investment made based on this is at the user's own risk.

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Selling pressure on US equities is nearing historical extremes. Goldman Sachs notes that hedge funds have reduced global equity holdings for six consecutive weeks, with the scale of net selling ranking as the third-highest in the last decade and nearing levels seen during the COVID-19 crash. Goldman Sachs anticipates that trend-following systematic investors (CTAs) will shift to net buying over the next month, and end-of-quarter rebalancing by pension funds is also expected to enter the market. Conditions for a market rebound are gradually gathering. Despite current market weakness and emerging signs of capitulation, extreme positioning is creating asymmetric upside for the market

- U.S. stock sell-off pressures are nearing historical extremes while conditions for a rebound are quietly accumulating.  
- Hedge funds have reduced global stock holdings for six consecutive weeks, with net selling reaching its third highest in the last decade, closely approaching the peak seen during the COVID-19 drop.  
- Goldman Sachs analysts suggest that the current extreme positions may create asymmetric upward potential, indicating a possible shift towards net buying by systematic investors in the coming month amidst technical factors that could alleviate selling pressure.

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US Equity Net Selling Pressure Nears COVID Crash Peak; Goldman Sachs: CTAs to Pivot Fully to Buying in the Next Month