Traders at Goldman Sachs warn that the sell-off in US equities is not over yet, despite recent strong rebounds in major indices.

According to Goldman, the key risk comes from trend-following funds that have recently received fresh sell signals. These systematic strategies tend to sell mechanically and persistently, meaning downside pressure could continue even if short-term rallies appear strong.

• 📉 Trend-following and CTA-style funds have flipped into sell mode
• 🔁 These funds often keep selling into both strength and weakness
• ⚠️ Their flows can dominate price action in choppy, volatile markets

Just last Friday:

• 📈 The Dow Jones hit a record high, an achievement publicly celebrated by Donald Trump
• 💚 Major US indices printed large green daily candles, fueling short-term optimism

However, Goldman cautions that price action alone can be misleading when systematic flows are still pointed lower.

For decades, traders lived by the mantra: 👉 “Don’t fight the Fed.”

Today, a new phrase is gaining traction on trading desks: 👉 “Don’t fight Trump.”

Markets are increasingly reacting not only to macro data and central bank policy, but also to political signals, rhetoric, and expectations of intervention or support.

• 📊 Strong rallies do not automatically mean the correction is over
• 🤖 Systematic sellers may continue to apply pressure
• ⚖️ The market remains fragile, headline-driven, and flow-dependent

Until trend-following funds finish rebalancing, volatility and sudden reversals are likely to remain the norm in US equities.