Technicals Are Setting Up For A Bounce But Goldman Flows Guru Warns It's "Not A Durable Low"

We’re clearly much closer – a lot of length has come out of the market, but it still does not yet look like a true capitulation event, according to Goldman's flows guru, Lee Coppersmith.

We’ve done a lot of work on positioning. The last several weeks were dominated by hedging activity, but this week marked a shift – our US Equity Sentiment Indicator dropped to -0.9, reflecting a bigger outright reduction in exposure. Historically, sub -1 readings are associated with above-average forward returns, with the signal improving further below -1.5. We’re not quite there yet, but we’re getting closer to levels where the distribution of outcomes begins to improve. Notably, this data only captures futures positioning thru Tuesday, and PB data only thru Thursday.