With markets getting close to oversold, everyone's hedged and global CTAs massively net sellers, there is some dry powder if the TACO trade finally takes place
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Source: Bloomberg, RBC
Yes, on the surface, the S&P 500 looks nearly oversold, but underneath, the situation looks different with only 11% of SPX constituents being oversold. Source: TME, Bloomberg, GS
We’re now well below the 200-day, with the 21-day crossing below it, a “light” death cross. RSI is at its most oversold levels since the Liberation Day panic, so a bounce is possible. But beware of the "catching a falling knife" strategy - very often a risky one. Source: TME, LSEG Workspace

