Goldman Sachs’ trading desk said the latest momentum pullback and position unwind in U.S. equities has entered a later stage, but meaningful de-risking is still not complete. The report, as cited by BlockTempo, said global gross leverage remains in the 93rd percentile of the past five years, meaning positions have backed away from the most crowded levels but are still far from light.
For the coming week, Goldman estimated that in a downside scenario, systematic strategies including commodity trading advisors, or CTAs, could sell as much as $24.9 billion in U.S. equities. In an upside scenario, the same cohort would buy only about $2.3 billion. That leaves potential selling more than ten times larger than potential buying. Goldman’s desk said the only steady source of demand in August is likely to come from corporate buybacks.
Leverage has come down, but risk has not fully cleared
The desk’s August flow rundown concluded that companies repurchasing their own shares are the main source of expected buying. Even so, the report said the broader de-risking process has not run its course.
Goldman pointed to global gross leverage still sitting at the 93rd percentile over the past five years. In the report’s framing, that means investors have stepped back from the most crowded positioning, but the market is not yet close to a genuinely light setup. Geopolitics, Federal Reserve policy and earnings season are all still in play, and the report said volatility is unlikely to fade quickly.
It also listed three factors weighing on upside in August: seasonal fund outflows, limited willingness from institutions to press risk, and dealers’ positive gamma positioning. Positive gamma tends to keep price action contained because market makers often sell when markets rise and buy when they fall.
CTA flows flipped direction within two weeks
The most important change in the report was not only the $24.9 billion figure itself, but the fact that the signal reversed.
Goldman’s July 14 positioning report had estimated that CTAs would buy $5.36 billion of U.S. equities in a one-week upside scenario and still buy $4.11 billion in a downside scenario. In other words, they were buyers even if the market fell.
Two weeks later, the updated version showed the opposite pattern: $24.9 billion of selling in a downside scenario and only $2.3 billion of buying in an upside scenario.
The article noted that the statistical treatment behind the two sets of figures is not exactly the same, so they should not be directly netted against each other. Even so, the reversal in direction is itself a signal. Systematic strategies have shifted from supporting the trend to amplifying it.
Goldman also said single-stock and index correlations are rising. That matters less when markets move up together. It matters more on the way down, when diversification becomes less effective.
Corporate buybacks are the clearest support in August
Goldman’s desk said the constructive part of the setup is corporate demand.
Roughly 31% of S&P 500 constituents have already emerged from pre-earnings blackout periods and entered open buyback windows. Goldman expects that figure to exceed 90% by mid-August. The significance, according to the report, is that this demand is mechanical: companies buy against board-approved authorizations rather than day-to-day headlines.
U.S. companies have authorized about $428 billion in buybacks so far this year, which the article described as the strongest start on record. Using a 90% execution rate, the full-year total could reach $1 trillion. Goldman also estimated that around mid-July, about 97% of S&P 500 constituents were still stuck in blackout windows, which coincided with the timing of the recent pullback.
Goldman’s hedging suggestions
The desk’s recommendation was straightforward: buy protection. The article said that included going long market correlation, buying three-month puts on the Russell 2000 ETF, and adding short-dated options protection for retail-favorite stocks. Goldman’s reasoning was that hedging costs still look relatively reasonable at current levels.
The piece also made a pointed observation: when the sellers of insurance start telling clients to buy insurance, they may be signaling that future pricing could become more expensive.
Crypto does not have a buyback bid
While the report focused on U.S. equities, the article argued that the implications are easy for crypto investors to see.
S&P 500 companies will increasingly become buyers of their own shares into mid-August, creating a mechanical support line unique to the stock market. Bitcoin has no equivalent mechanism. Even if digital asset treasury companies have repurchase authorizations, those programs target their own shares rather than crypto holdings. If their stock trades at a discount, the incentive could even tilt toward selling coins to buy back stock.
That leaves a different downside structure across the same deleveraging cycle. U.S. equities have an automatic source of demand in August. Crypto has to rely on spot buyers.
At the same time, the article said crypto already went through a sharp cleanup in the second quarter. Spot trading volume fell 42%, the lowest since 2023, and leverage was flushed more aggressively than in equities. The article cited that as one reason Bitcoin held up comparatively well when the July AI-led deleveraging wave hit global stock markets.
That sets up the next question for August: how much spot absorption remains in crypto without a buyback bid underneath it. After the Federal Reserve left rates unchanged the night before, Bitcoin climbed back above $64,000, which the article described as the first test point.
About the report
The Goldman trading desk positioning note was described as an internal communication sent to institutional clients and not a publicly released document. The figures cited in the article came from a retelling of that report. Estimated CTA flows are model-based, can change daily with prices and volatility, and should not be read as committed trading volume. The article also stated that the material was not investment advice and was provided only as a reference for data and institutional views.
What is a CTA?
The article defined CTAs as commodity trading advisors, broadly referring to trend-following funds that enter and exit positions based on signals. They do not primarily trade on fundamentals. They react to price and volatility, which is why they can accelerate selling in a downturn and chase strength in a rally. At sufficient scale, they can magnify existing market moves.
Why do buyback windows matter for stock prices?
Public companies typically face blackout periods ahead of earnings, during which they cannot repurchase their own shares. That removes a large mechanical source of demand from the market. Once earnings are released and the window reopens, buybacks can resume. The article said that is one reason mid-August is seen as a point when support could strengthen.