1 Apr 2026
Still, it is difficult to say if this is the start of the true TACO trade. Indeed, it looks more like a brutal short squeeze.
Over the last 2 weeks positioning has flipped rapidly. What began as a measured de-risking has accelerated into a full systematic unwind, with flows, gamma, and liquidity all reinforcing each other in the same direction. When positioning resets this aggressively, it rarely resolves cleanly. The next move is often dictated more by market mechanics than by fundamentals. And this is what took place yesterday.
CTAs have swung from heavily long to decisively short in a very short time. Goldman Sachs estimates roughly $184bn of global equities have been sold over the past month, pushing positioning to a net short of around $47bn—approaching levels last seen during peak “Liberation Day” stress. Their projections suggest that upside now represents the largest convexity risk. We’ve seen this pattern before: sharp CTA reversals tend to be followed by meaningful market rebounds.
From a geopolitical, macro and fundamentals perspectives, there are still many unknows: 1/ if the US leaves the region in 2 weeks, who will tale care of the Strait of Hormuz ? 2/ What will be the impacts on GDP and inflation? 3/ Will companies come with weaker guidance during Q1 reporting season?
Source: GS, TME
