Systematic Flows Monitor: NDX selling gives way to two-way risk; US Tsy shorts stretched as JPY shorts tested

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Systematic Flows Monitor

NDX selling gives way to two-way risk; US

Tsy shorts stretched as JPY shorts tested

CTA equity unwinds broaden but risk turns two-sided

31 July 2026

Nasdaq weakness appeared to spill into broader equities on Wednesday before markets

reversed higher on Thursday. The Nasdaq had struggled to gain traction through the first

three sessions, culminating in pronounced downside Wednesday and pressure reaching

the S&P 500 that same day. This week’s price action suggests many CTAs have now derisked or unwound their Nasdaq exposure, but our models indicate S&P 500, Russell

2000, and EURO STOXX 50 positioning remains largely intact and still stretched long.

Thursday’s rebound provided some cushion, though the rally lost some momentum

Friday as Apple’s earnings weighed on the index. Looking ahead, contagion risk to

broader equities persists should markets roll over. However, if equities continue to

recover, near-term CTA buying would likely be concentrated in Asian indices, while CTAs

could also partially re-accumulate NDX exposure, potentially adding fuel to the rebound.

As a result, systematic flow risk is now more two-sided than in recent weeks.

Equity Derivatives

Global

CTAs remain short US Treasury futures after FOMC

Chair Warsh’s second Fed meeting sent yields higher this week (see US Watch report),

leading trend followers to extend short positions at the back end of the Treasury curve

which could continue into next week. Front-end positioning is likely still near max short

levels, leaving it more dependent on changes in volatility at this stage. Outside the US,

CTAs could also be extending Bund shorts. In FX, the US dollar suffered its largest

weekly loss since January, and our model indicates that some CTAs stopped out of JPY

shorts on Thursday’s possible FX intervention (see Japan Rates and FX Watch report). In

contrast, short EUR and CAD positions remain intact, but short covering risks remain

elevated.

Trend followers still mostly long oil despite pullback

Oil futures snapped a three-week streak of gains as the US paused strikes on Iran.

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