Citi strategists, led by Chris Montagu, attribute Monday’s sharp stock market sell-off to extended bullish positioning in the S&P 500 and Nasdaq 100, which left markets vulnerable to a pullback.
Key Takeaways

S&P 500 positioning hit +3, reflecting an overextended bullish stance.
Nasdaq 100 saw mixed flows but remained at the 90th percentile of its three-year range, increasing downside risk. A dip below 20,900 could trigger significant losses.
Russell 2000 positioning rose to +1.5, but risks are lower due to modest profit-taking.
S&P 500 downside risks: A drop below 5,950 could put all long positions at a loss, although average losses would be smaller than in the Nasdaq.
Europe:

EuroStoxx 50 returned to neutral as bullish flows increased.
DAX and FTSE 100 showed weaker trends, with the FTSE 100 remaining bearish.

Asia:

China’s A50 index saw bullish flows on optimism over potential U.S. tariff easing.
Other Asian indices moved closer to neutral or slightly bullish.

Investor Insight
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