After US market shake-out, signs suggest it is too soon to say worst is over
SPY•Indicators show it may be too soon to conclude the US stock selloff is over: tech positioning fell below its April 2025 lows, while technical analysts expect volatility to continue for a couple more weeks.
1. Positioning shifts
A selloff has left tech and AI-related stocks about 10% below their recent peak after the Nasdaq-100 hit a record high in early October. Deutsche Bank data show investors have cut exposure to technology stocks since late September, with positioning falling below its April 2025 “Liberation Day” lows last week.
2. Mixed market signals
The modest increase in expected stock-market correlation suggests investors view the latest decline as more sector-specific than a broad economic downturn, Asym Research founder Rocky Fishman said. Retail call buying in AI stocks fell sharply last week, leaving a put-call gauge near the middle of its 13-year range; Carrick Lane partner John Marshall said the AI trade no longer looks crowded in the short term, but positioning alone does not yet signal a buying opportunity.
3. Technical caution
Fundstrat technical strategist Mark Newton said the rebound in the Invesco QQQ ETF stalled below its downtrend from late October. He said bearish short-term trends and momentum, and the absence of a trend-exhaustion signal, point to likely volatility in US stocks for a couple more weeks.
