Financial blog Zerohedge notes that if the broad panic-driven buying in U.S. stocks since early this month occurs after a genuine &#34;all-clear&#34;—such as former President Trump's handling of tariff issues last year—it would be healthy. However, if this panic buying is built solely on the assumption that &#34;what Trump says each day has substantive meaning,&#34; the opposite holds true—not only is it unhealthy, but it could also constitute a major &#34;bull trap.&#34;
An article from Wallstreetcn.com mentions that, from a technical analysis perspective, this trend has largely benefited from record-breaking CTA buying, which has provided support for U.S. equities.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/70cb208d-a281-498c-8a17-2e08a2e00882.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/70cb208d-a281-498c-8a17-2e08a2e00882.png"/>
Current positioning remains extremely net-short, far below overcrowded levels—a signal arguably most bullish for the market as it ensures continued buying momentum. Buying demand not reliant on human subjective judgment will persist, stock buybacks are set to resume, and declining volatility will allow net exposure to rise again.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/2712e787-23bc-48ec-b66a-e1a5438d4a68.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/2712e787-23bc-48ec-b66a-e1a5438d4a68.png"/>
That said, Goldman Sachs trader Cullen Morgan wrote: &#34;We have rallied fast and hard; signs of chasing and overbought conditions are emerging.&#34;
A series of indicators point to this:
<blockquote>
<ul>
<li>Near-record QQQ call option volume.</li>
</ul>
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<ul>
<li>The market entered overbought territory in the second-shortest time on record: measured by the 14-day Relative Strength Index (RSI), the S&amp;P 500 moved from oversold levels to overbought territory by Thursday in just 11 days.</li>
</ul>
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/aaf70012-8dae-4926-8b47-8a7f7cb70ccb.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/aaf70012-8dae-4926-8b47-8a7f7cb70ccb.png"/>
Deutsche Bank noted: The speed of this rally is astonishing, with indices gaining a staggering 10.7% over the past 11 trading sessions. This pace slightly surpassed last year's &#34;Liberation Day&#34; rebound, which saw a +10.1% gain over the same period. Excluding overlapping scenarios, such rapid gains are rare. Since the turn of the century, the S&amp;P 500 has achieved a 10%+ gain within 11 trading sessions only 15 times, averaging roughly once every two years.
This rally ranks second only to the even more explosive rebound in the summer of 1982, when Paul Volcker sharply cut interest rates from 13%.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/79b6b140-1eea-44a6-8e65-4a2d17c32bee.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/79b6b140-1eea-44a6-8e65-4a2d17c32bee.png"/>
</blockquote>
<h2>What Comes Next?</h2>
Goldman Sachs' Morgan believes: A short-term pullback would likely be the healthiest thing for this market, but the overall uptrend seems difficult to fight. He suggests replacing long positions with cheap call options on individual stocks or indices, offering excellent value. For hedging tools, Morgan favors downside protection via put spreads or ratio put spreads on IWM.
Meanwhile, the Nasdaq-100 index has risen for 13 consecutive days—the longest streak since 2013. The Nasdaq Composite Index has also risen for 13 straight days, its longest run since January 1992. Since 1983, similar consecutive-gain streaks have occurred only seven times; subsequent forward returns have been quite substantial.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/ca4b9e98-4a39-4ae1-9245-ae93e03c20f6.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/ca4b9e98-4a39-4ae1-9245-ae93e03c20f6.png"/>
According to Goldman Sachs Prime Brokerage data, the net exposure and long-to-short ratio across all prime brokerage books remain at low levels, sitting at the 42nd and 3rd percentiles respectively over a three-year lookback (compared to the 93rd and 14th percentiles in early March), while total leverage remains at the 97th percentile of the past three years. Overall short exposure in macro products (indices plus ETFs) is only slightly below the peak level seen at the end of March.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/fe18a4f9-217d-418b-bd28-946ef0b242d7.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/fe18a4f9-217d-418b-bd28-946ef0b242d7.png"/>
As earnings season for large-cap U.S. tech stocks begins, Goldman Sachs traders note that hedge funds have started reaccumulating positions in the Mag 7 mega-cap technology giants, though these positions remain far below the peak levels seen in early 2016.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c4eee452-3ef2-4e88-9089-af5922ac749d.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c4eee452-3ef2-4e88-9089-af5922ac749d.png"/>
Systematic strategies have attracted significant attention. U.S. equities have seen the largest five-day buying volume on record. Goldman Sachs' latest estimate places CTA (net) long positions at approximately $16 billion (with historical highs reaching $74 billion). Although there remains room for further accumulation—Goldman currently estimates CTA buying over the next five days could reach $23 billion—this represents a sharp decline from the $70 billion seen earlier this week, meaning the pace will no longer be as aggressive.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/5082ea9a-6dfe-4ce1-aafd-adf582e5e910.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/5082ea9a-6dfe-4ce1-aafd-adf582e5e910.png"/>
We have now rebounded into the peak Gamma zone. Citing third-party data, Goldman Sachs notes that dealers' net Gamma longs stand at approximately +$9.5 billion—an amount that appears somewhat suspicious, representing one of the highest levels in the past four years. Morgan estimates that from here, dealer Gamma will gradually decrease during rallies but exhibit stickiness during declines. After April option expirations, Goldman expects positions to become cleaner, with Gamma strike prices shifting higher through systematic covered calls.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/bb68b09b-a026-463c-a5b8-443f4a900559.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/bb68b09b-a026-463c-a5b8-443f4a900559.png"/>
Finally, Morgan points out that the volatility market has shown clear loosening: Goldman's U.S. Volatility Fear Index has fallen below 5/10, whereas just weeks ago it was above 9, implying implied volatility has fully retreated. Consequently, Goldman's derivatives team can now directly hold long volatility positions in many scenarios.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/ee7a630b-5ed5-4979-879e-420733fd749c.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/ee7a630b-5ed5-4979-879e-420733fd749c.png"/>

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Current U.S. market positioning remains extremely net-short, far below overcrowded levels—a signal arguably most bullish for the market as it ensures continued buying momentum. That said, Goldman Sachs trader Cullen Morgan wrote: "We have rallied fast and hard; signs of chasing and overbought conditions are emerging. A short-term pullback would likely be the healthiest thing for this market, but the overall uptrend seems difficult to fight."

- The article discusses recent developments in the U.S. stock market, highlighting a surge in panic buying and its implications.  
- It notes that despite current bearish positions, the market shows signs of strength, bolstered by record CTA purchases and a significant increase in stock prices, particularly within the Nasdaq 100 index.  
- Analysts suggest that while a market correction may be healthy, the overall upward trend remains robust, with potential strategies for investors to consider as volatility decreases.

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Goldman Sachs: U.S. Stock Rally Hard to Fight, but Short-Term Pullback Would Be Healthiest