Goldman Sachs estimates that trend-following funds (CTAs) sold nearly $3 billion in Nasdaq 100 futures over the past three trading days, marking the largest three-day sell-off since March 2025. Ironically, the massive sell-off was followed by a rebound in US stocks, making the Nasdaq 100's performance appear as if CTAs sold at a short-term low. CTAs typically adjust their positions automatically based on market trends, reducing positions when the index falls and gradually buying back in as the trend strengthens. If this rebound continues, CTAs may increase their positions again, transforming the previous concentrated selling into subsequent buying, further amplifying market volatility.
