Bearish views on the stock market culminated in the sale of an estimated record of $40 billion of S & P 500 stock index futures over the past five sessions, but that selling pressure is about to ease, according to a note from the Goldman Sachs trading desk.
Hedge funds that use a managed futures strategy (Commodity Trading Advisors, or CTAs) recently unwound positions in S & P 500 futures at the greatest speed and magnitude "on record," Goldman said.
With most of those positions now squared away, however, Goldman claims "we are closer to the end of this sell pressure than not."
Goldman said lower risk, lowest cost trades are available in one-month call options on the SPDR Dow Jones Industrial Average ETF Trust , Health Care Select Sector SPDR Fund , Consumer Staples Select Sector SPDR Fund and SPDR S & P 500 ETF Trust .
Greater returns might come from stocks that Goldman added to its "conviction list" Monday, such as Nvidia , Cintas and Quanterix Corp. (Goldman removed Salesforce and Johnson Controls from the "conviction list" this week.)
Persons:
Goldman Sachs, Goldman, Salesforce, Michael Bloom
Organizations:
Trading Advisors, Dow Jones, ETF Trust, Health, Fund, Consumer, Trust, Nvidia, Quanterix Corp, Johnson