What are the reasons for institutions to start building positions, rebound or reversal? (1) Since Williams' speech last Friday, investor sentiment has started to rebound, once again proving that the Federal Reserve's monetary management is the main narrative of the current market. As long as the expectation of a December interest rate cut is not broken and the dot matrix does not show a clear hawkish trend, the market will naturally remain in a more optimistic range. In fact, this also indicates that, without any systemic issues at the macro level, investors' focus is no longer on the individual data itself, but on whether the Federal Reserve is willing to hinder the rise of inflation by triggering an economic downturn. Figure 1: Williams' speech drives the risk market to stop falling and rebound Williams' speech was able to immediately stabilize the market not because of its dovish content, but because it sent a very clear signal that the Federal Reserve has realized that the tightening of the financial environment has exceeded expectations and needs to communicate to avoid unnecessary market deleveraging. In the current window of slowing growth but not declining, and declining inflation but not yet reaching its end, changes in policy attitudes will be amplified by the market as directional guidance. Therefore, even if there is still noise in fundamental data, as long as monetary policy does not deviate from the loose path, funds will tend to buy expectations, wait for confirmation, and then find reasons for self paralysis. This is also the reason why risk assets have been able to quickly recover and even actively buy in recent days. The trading rhythm of the market is shifting from hedging to waiting, and then switching from waiting to exploratory buying. Figure 2: Hedge funds and institutions begin laying out in the third week of November During the week, I have presented a lot of data to inform everyone about the current market situation. Overall, although retail investors have been the biggest supporters of the US stock market in the past two years, from the data in November, there is a trend of surrender among retail investors. However, the hedge funds that have been short selling and net outflows since 2025 have shown significant inflows since November. If the outflow of retail investors may be due to the upcoming Thanksgiving and Black Friday, then institutional bottom fishing may be a judgment of the cyclical bottom market. Why would I say that? At the beginning of the interest rate hike cycle in 2022, only retail investors continued to buy. Because 2022 is the new round of monetary policy cycle for the Federal Reserve, which means that the Fed has started a strategy of high interest rates to reduce inflation. However, high interest rates often lead to a decrease in liquidity. Therefore, my judgment is that institutions and hedge funds are unwilling to increase their investment in risk markets during the period of high interest rates, and instead choose to focus on hedging. Therefore, it can be seen that from 2022 to 2024, professional funds have almost always been net outflows. Even if the market rebounds, they only reduce their holdings at high prices and are unwilling to bear higher risk exposure in the context of liquidity tightening. Bitget VIP， Lower rates and more generous benefits