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Goldman Sachs equity derivatives specialist Cullen Morgan just dropped a note that should make anyone riding the current rally a little uncomfortable. The message was simple: flows were more “gross down” than “net up.”
In English: while net market returns looked positive, the underlying trading activity showed more sellers than the surface suggested.
What Morgan actually said
Morgan, a Vice President and equity derivatives and flows specialist at Goldman Sachs, issued the cautionary note on August 3. His core observation was that recent market gains are potentially misleading because they obscure significant weaknesses in actual trading flows.
Morgan has built his reputation tracking derivatives positions and client flows. His previous analyses have covered Commodity Trading Advisor positioning, or CTA positioning, which refers to systematic, algorithm-driven funds that follow momentum and trend signals across asset classes.
In prior notes spanning from 2024 through 2026, Morgan has flagged that CTA long equity exposure sat in the 94th percentile. Morgan’s estimates of potential CTA sales ranged from $1.2 billion to $32 billion depending on the market scenario.
The gross vs. net illusion
Net flows aggregate all buying and selling into a single number. If institutions buy $10 billion and sell $9 billion, the net flow is positive $1 billion. But the gross selling of $9 billion tells you there’s enormous distribution happening under the surface.
Morgan’s warning suggests that large sellers are active, but their impact is being masked by enough buying activity to keep net figures in positive territory.
Morgan also referenced unprecedented weekly trends in the S&P 500, and his client communications have consistently emphasized the gap between headline performance and underlying positioning risk.
Why crypto markets should care
Morgan’s note didn’t mention crypto once. Bitcoin and the broader digital asset market have become increasingly correlated with equity risk sentiment over the past several years. Systematic funds that run cross-asset momentum strategies don’t discriminate—they sell what’s liquid when signals turn negative.
The $1.2 billion to $32 billion range of potential CTA sales that Morgan has modeled represents exactly the kind of systematic, momentum-driven liquidation that has historically spilled into crypto markets.
For crypto traders specifically, market breadth and flow quality in traditional equities serve as a leading indicator for digital asset volatility. When Goldman’s derivatives desk is telling clients that the flow picture is worse than it looks, that’s not noise. That’s signal.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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