Commodity trading advisors executed massive equity selling last week, reducing their $180 billion net long exposure to global stocks as systematic funds triggered stop-loss levels, according to Bank of America. The de-risking wave began in European and emerging markets before spreading to U.S. indices, where models now show substantial unwinding in the S&P 500 and Nasdaq.

BofA noted that only residual long positions remain in major U.S. indices, primarily held by slower trend-following strategies. Shorter-term CTA models likely shifted to short positions during the week, though these represent a smaller share of assets under management. The bank estimates systematic strategies could sell $62 billion more if markets fall or buy $87 billion if they rise in the coming week.

Despite the sharp reduction in equity exposure, BofA sees potential for a turning point as risks become "two-sided." Commodity gains have partially offset equity losses, with CTAs approaching their largest long oil positions in a year. Meanwhile, rising Treasury yields and a stronger dollar forced unwinding of Treasury futures and currency trades, including positions in the Mexican peso and British pound.