Record Systematic Shorts: Profit-Taking Pullback Ahead | Seth Golden

Goldman Sachs' chart, which tracks the rolling one-month change in positioning among systematic traders—primarily rule-based funds, including commodity trading advisors (CTAs), that rely on predefined models and algorithmic signals—points to a potential near-term pullback in US stock indices.

 

Record short positioning of systematic traders in Q1 2026—profit-taking pullback likely.

This segment of systematic traders has emerged as one of the most influential forces in equity markets in recent months. Having established aggressive short positions in spring 2025 and again in 2026, the group reached its longest and most extreme short exposure on record. Such outsized positioning suggests that systematic traders are now poised to take profits, thereby increasing the likelihood of a near-term correction in major US stock indices.

 

By early May 2026, a broad consensus had emerged among Goldman Sachs, JPMorgan, and Bank of America that the prevailing buying impulse in US equities had largely exhausted itself. Goldman Sachs specifically highlights that systematic traders (CTAs) remain positioned at sizable long levels—approximately $32–44 billion net in the S&P 500—but are poised to shift toward neutral or modest selling in flat or declining markets. Should key downside thresholds be breached, this could trigger substantial selling pressure exceeding $50 billion. 

 

Nobody wants puts on the Nasdaq: The put/call ratio has collapsed to its lowest

level since 2023. Near-term mean reversion and price consolidation next?

Taken together, these flows indicate that the momentum-driven buying that fueled the recent rebound has become stretched, pointing to a material decline in marginal demand. For individual retail investors, this setup implies an elevated risk of near-term exhaustion or pullback in major indices and technology stocks once systematic support diminishes. While continuation remains possible in a strong uptrend supported by further modest CTA buying, any meaningful stall or breakdown could rapidly amplify selling pressure.

 

Reference: 

Seth Golden, May 7, 2026.

 

US equity market breadth is at one of its lowest levels since the 1980s, reaching near-record lows on a long-term chart from 1985–2025. The latest reading sits far below average and one standard deviation below the mean, signaling extreme narrowness despite repeated new highs in major indices. This is driven by heavy capital concentration in a small number of AI, semiconductor, optics, and memory stocks, which are powering index gains while the vast majority of equities significantly lag. 

The S&P 500 just saw the largest call-buying day in history: $2.6T in call volume. Massive call buying forces market makers to hedge by buying stocks, pushing prices higher, triggering more hedging, and fueling a gamma squeeze. It’s powerful on the way up—and vicious on the way down when flows unwind or calls expire. This isn’t fundamentals driving markets anymore. It’s options flow moving the world’s largest index. The question isn’t if it unwinds — it’s when.   

ES (daily candles): Expect a pullback or sideways consolidation toward at least the neutral mean (solid black rising line)—the equilibrium point between the premium (overextended upper red) and discount (overextended lower green) zones. 

NQ (daily candles).
 Today, May 7 (Thu) is the scheduled ideal ITD #5 peak (± 4 CD) in US stocks.

 

Major banks show broad agreement on resilient 2026 S&P 500 earnings growth driven by AI and the economy, but diverge on the index target due to differing views on valuation multiples. Here is a combined comparison table of their latest 2026 forecasts (as of late April 2026): Goldman Sachs, JPMorgan, and Morgan Stanley are constructive, viewing the price-EPS divergence as a buying opportunity with prices likely to catch up to upward earnings revisions. Bank of America is the most cautious, anticipating further P/E compression despite solid EPS growth.   

See also: 

Jason Goepfert (May 4, 2026) - Hedge Funds Dump Tech, While Retail Piles Into QQQ.

Alex Krainer (April 27, 2026) - S&P 500 Dumb Money Confidence Enters Extreme Optimism.

Jeffrey A. Hirsch (May 1, 2026) - May Stock Market Performance in Midterm Election Years. 

The US Just Made Gold Its Number One Export | Gerry Nolan

America just made gold its number one export, and it’s pouring straight into China via Switzerland. For the last five months running, US gold shipments have topped everything else the country sells abroad. In March alone, they were 1.7 times larger than oil, twice pharma, and two and a half times aircraft engines.

 

» How exactly does this serve the United States? «

  

Most of it doesn’t even stay in America: it sails through Switzerland’s refineries and lands in Beijing’s vaults. This is highly unusual. The US doesn’t ship its oldest store of value to its biggest rival at record pace under normal conditions. Geopolitical tension, inflation hedging, and quiet signals that gold is becoming a settlement mechanism in US–China trade have flipped the script.

America is quietly surrendering the one asset that still commands respect when the dollar starts to wobble. It’s the visible symptom of a deeper reckoning: Beijing is no longer content to hold endless piles of US Treasuries or accept dollars for its oil and goods. With every sanctioned barrel and every BRICS handshake, China is forcing real settlement in the one currency that can’t be printed into oblivion. The empire ships bullion east while its navy steams around the Gulf, pretending it still runs the world. The numbers don’t lie, and neither does the direction of travel.

» Real money to the competition while the dollar-printing machine keeps spinning. «

 

So, tell how exactly does this serve the United States? It doesn’t. But it sure as hell serves China. The empire is literally melting down its patrimony and handing the real money to the competition while the increasingly worthless dollar-printing machine keeps spinning.

Gerry Nolan, May 5, 2026.

 

See also:

Martin Armstrong (May 3, 2026) - Gold and the Stock Market Will Rise Together. (video)
Ray Dalio (2025) - How Countries Go Broke: The Big Cycle.

Markets Diverge as US Entered New Hurst 18-Month Cycle | David Hickson

Global stock markets are exhibiting a rare divergence where the US market is decoupling from international peers like the Australian ASX due to staggered major cycle troughs. The S&P 500 is emerging from an 18-month cycle trough (formed March 31), while the ASX and other global stock indices are still trending downward toward their equivalent troughs expected in July.

S&P 500 / NASDAQ: The outlook is predominantly bullish following the 18-month cycle trough. Price targets remain outstanding near 7,424, with the next minor softening expected during an 80-day cycle trough in late May.

 

 S&P 500 (daily candles), March to May 2026: 80-day cycle trough expected in late May.

 

Australian ASX: Bearish to neutral for the next two months. Expect a continued move downward or sideways as these markets seek an 18-month cycle trough positioned in late July 2026.

 

ASX (weekly candles), April 2025 to December 2026: 18-month cycle trough expected in late July 2026.

 

Gold: Cautiously bearish. While a 40-day trough has likely formed, providing a short-term bounce, the potential 9-year cycle peak in late January suggests that rallies may be limited by significant long-term down pressure.

 

 Gold (daily candles), February to June 2026: Potential 9-year cycle peak and long-term down pressure.

  

Bitcoin: Short-term bullish as price moves out of a 40-day trough toward a 20-week cycle peak. However, a broader correction is expected in early June as the market moves into a 20-week cycle trough.

 

 Bitcoin (daily candles), February to June 2026: 20-week cycle trough expected in early June.

 

Reference:
David Hickson (May 4, 2026) - The Markets Are Diverging! Hurst Cycles Market Update. (video)

 

See also:

David Hickson (March 9, 2026) - Hurst Cycles Update for the S&P 500 and Bitcoin. 

Namzes (April 19, 2026) - S&P 500 Bear Outlook Intact: Q3 3.5-Year Hurst Cycle Low.

Jeffrey A. Hirsch (May 1, 2026) - May Stock Market Performance in Midterm Election Years.

Hedge Funds Dump Tech, While Retail Piles Into QQQ | Jason Goepfert

Hedge funds sold US tech stocks at the second-most aggressive pace in a decade (largest net selling since 2021), according to Goldman Sachs Prime Book data.

Everybody back in the pool: 21-day sum of daily fund flows in QQQ.

 

This institutional selling coincides with strong retail buying, as rolling 21-day QQQ fund flows hit the third-largest inflow in recent years—even as Nasdaq 100 prices rise. A classic smart money versus retail divergence. May 7 (Thu) is the scheduled ITD #5 peak (± 4 CD) in US stocks.

 

Reference:
Jason Goepfert (May 4, 2026) - Funds are selling while retail is buying.

Goldman Sachs Prime Book, as of April 30: Go with the flow.

The GS Prime Book reflects aggregated activity from Goldman's prime brokerage clients (a large but not complete slice of the hedge fund universe), so it's directional but not exhaustive. Similar insights sometimes come from JPMorgan or Morgan Stanley prime services reports. Goepfert specializes in sentiment indicators, including fund flows, options activity, positioning (e.g., hedge funds via prime broker data like Goldman Sachs), and retail vs. institutional behavior (e.g. Dump Money Confidence vs. Smart Money Confidence). Access requires a subscription, but he often shares highlights on X.

 

As of May 1, Dumb Money Confidence was very optimistic,

while Smart Money Confidence was neutral. 

See also:
Alex Krainer (April 27, 2026) - S&P 500 Dumb Money Confidence Enters Extreme Optimism. [May 3 update HERE] 

Richard D. Wyckoff (1931) - The Wyckoff Method of Trading in Stocks: Accumulation and Distribution Schematics. 

S&P 500 Forecast for May 2026 | Nicholas D. Savino

The primary forecast pattern for May.

 

The forecast focuses on market direction and timing rather than magnitude of price change. Key challenges in advanced cycle spectrum analysis (as implemented in Timing Solution) include Discrete Fourier Transform (DFT)-based spectral decomposition of price data into dominant cycles, which typically requires at least 3 years of daily observations for 30-day forecasting, with more than 5 years being optimal; pattern recognition; construction of composite cycle projection lines; and identification of initial directional biases for the upcoming month. There is also the inverse pattern, which is currently not favored by Nicholas Savino.  

 

The inverse forecast pattern for May.

 

How the April 2026 forecast played out. 

 

Reference:

Nicholas D. Savino (May 2, 2026) - S&P 500 Forecast for May 2026.

 

See also:
Jeffrey A. Hirsch (May 1, 2026) - May Stock Market Performance in Midterm Election Years.

Namzes (April 19, 2026) - S&P 500 Bear Outlook Intact: Q3 3.5-Year Hurst Cycle Low.

Seasonal Odds Favor S&P 500 Gains Next Week (May 2–9) | Wayne Whaley

The S&P 500’s performance during the week of May 2–9 (Sat-Sat) has historically been fairly neutral over the past 51 years, posting 28 advances and 23 declines for an average gain of just 0.09%. 

 

» Seasonal evidence alongside recent momentum points modestly in favor of higher prices over the coming week. «

 

► 51-year May 2–9 performance: mostly neutral (+0.09% avg; 28 up / 23 down)
► Overall seasonal and momentum bias: modestly bullish for next week
► First half of May often mirrors first half of April behavior
► 2026 April (Apr 1–16): strong +7.09% advance
► Strong April (>1.68%) historically: 15 up / 2 down in following week

► Weak April (<-0.45%) historically: 6 up / 11 down in following week
► Closest strong April cases (2009, 2020) saw +5.89% and +3.50% gains

 

However, a broader set of seasonal studies suggests that stronger recent price trends tend to support continuation, implying a bias toward further gains in the coming week. Notably, the first half of May has often behaved similarly to the first half of April, reinforcing the relevance of the recent April setup.

In the data breakdown, May 2–9 returns are grouped into three 17-year categories based on the S&P’s performance from April 1–16 over the same 51-year history. In 2026, the index rose 7.09% during that April window. In the 17 prior instances where April 1–16 gains exceeded 1.68%, the S&P advanced in 15 of the following May 2–9 periods versus only 2 declines. By contrast, when April 1–16 was weaker than –0.45%, the next-week record flipped to 6 up and 11 down. More specifically, in the two historical cases most comparable to 2026—2009 and 2020, both with April gains above 5%—the S&P followed with strong May 2–9 advances of 5.89% and 3.50%, respectively.

The accompanying ratings system scales outcomes into -3 to +3 standard deviation bands on a -100 to +100 framework, with outliers down-weighted to better reflect typical behavior; readings below -50 or above +50 are treated as trade-alert conditions. While multiple non-seasonal factors can certainly influence market behavior, the combined seasonal evidence alongside recent momentum points modestly in favor of higher prices over the coming week.

Reference:

Wayne Whaley (May 2, 2026) - Whaley-AI analysis of the seasonal odds for the S&P next week (May 2–9).

 

S&P performance after a 10% calendar month: "For me, from a directional signal perspective, it is a bull friendly development but more so because it occurred in the barometrically important month of April than the fact that it was a rare double digit month."

See also:

Jeffrey A. Hirsch (May 1, 2026) - May Stock Market Performance in Midterm Election Years.

May Stock Market Performance in Midterm Election Years | Jeff Hirsch

The S&P 500 has posted gains during the first three trading days of May in 19 of the past 28 years.

 

Early May Strength Turns to Chop Until Late Month Pop.

Weakness often emerges around the May 6 (Wed),  May 8-12 (Fri-Tue), and after May 18 (Mon). The final four days usually post solid gains (May 26-29, Tue-Fri), though the last day of May has been notably weak.

 

In midterm election years, May typically starts higher but turns broadly weak by May 5 (Tue), with softness persisting through most of the month.

 

Reference:

Jeffrey A. Hirsch (May 1, 2026) - Early May Strength Turns to Chop Until Late Month Pop.

 

 S&P 500 Midterm Election Year Seasonal Pattern, 1949-2024. 

 

S&P 500 Average Performance and Hit Rate per Day (1928-2024). 

   

In the Four-Year Presidential Cycle, May of midterm election years has historically been the weakest,

with all major indices avg. declines: DJIA –0.08%, S&P 500 –0.63%, NASDAQ –0.76%, NYSE –1.19%.

  

Historical S&P 500 data shows May averages just 0.38% gain since 1950 overall, but improves to 2.58% average and

9-1 record in the 10 years with April gains of 5% or higher, including the last seven straight positives post-1985. 

 

When the S&P 500 closes April at a new all-time monthly high since the early 1960s (17 instances shown), 
the remainder of the calendar year has been positive 100% of the time with an average gain of +10.35%. 

 

 

See also: 

Jeffrey A. Hirsch (December 29, 2025) - 2026 Midterm Election Year Seasonal Patterns of US Indices.

Alex Krainer (April 27, 2026) - S&P 500 Dumb Money Confidence Enters Extreme Optimism. 

@Fiorente2 (April 20, 2026) - DJIA 2026 vs Top Three Midterm Correlated Years Since 1886.

Namzes (April 19, 2026) - S&P 500 Bear Outlook Intact: Q3 3.5-Year Hurst Cycle Low. 

Nicholas D. Savino (May 2, 2026) - S&P 500 Forecast for May 2026.

The Sequence of the EU/UK’s Seven-Wave Crisis | Kirill Dmitriev

Kirill Dmitriev, CEO of Russia’s sovereign wealth fund (RDIF) and a presidential envoy, has outlined a forecast of cascading crises in the EU and UK beginning in May 2026. 

 

Dmitriev is signaling that, once the EU and UK accept the reality on the
battlefield—that Russia has prevailed—a new phase of cooperation
 based on trust and mutual respect could become possible.

According to this scenario, an initial phase of jet fuel shortages would be followed by broader disruptions in oil, gas, and fuel supplies, along with reduced availability of fertilizers and resulting crop and food shortages by the summer. This would ultimately lead to accelerated deindustrialization, a breakdown in currency stability, fiscal conditions, and debt markets, and culminate in a social and political crisis in the fourth quarter of 2026. 

 

 » Madness and a Kamikaze approach to an existential crisis. « 

Germany's Self-Destruct Pact: Merz Pushes Europe to the Brink.

  

» Awakening and Reset in 2027. «

 

Putin's top negotiator, Dmitriev, casually wake-surfing off Miami on December 27, 2025.

 

Dmitriev's narrative concludes by linking these potential disruptions to a broader "awakening" and systemic "reset in 2027." Is this part of a really smart Good Cop-Bad-Cop diplomacy psy-op, is this all actually heading toward total EU/UK defeat, followed by catharsis, mutual respect, and a prosperous future, or is it merely wishful thinking from a fifth column pro-West liberal?

Powerus, a US company, has secured a contract to supply interceptor drones to the US Air Force, though the quantity and total value remain undisclosed. Notably, Powerus is backed by Eric Trump and Donald Trump Jr.—sons of the sitting US president. The deal raises conflict-of-interest concerns, as it points to potential financial gain from military contracts tied to ongoing US operations in Ukraine and West Asia. War pigs gotta war pig? 

» What we’re looking at is a global struggle—the Great Game Renewed. It’s developing across multiple theaters, starting in the Arctic, where Russia effectively controls the most strategically important coastline for emerging trade routes. The middle layer is the Baltic states pushing toward escalation with Russia. Then comes Ukraine at the center. Below that are Georgia, Azerbaijan, Armenia, the Caucasus, and Central Asia. At the bottom sits Iran. «

Although Western media prematurely declared Mali defeated, that collapse did not occur:  Malian Armed Forces and Russian Africa Corps airstrikes decimated al-Qaeda-linked logistics and neutralized leadership in Kidal, stabilizing northern front lines through April 2026.

See also:

Alex Krainer (April 21, 2026) - Entering the First Global Total War.

Jiang Xueqin (April 17, 2026) - US War Against the World, and the Future International Order.

Sergey Karaganov (January 16, 2026) - "Russia Will Nuke Germany and UK if Ukraine War Persists."