Is Record Cash on the Sidelines Bullish for Stocks?

The short answer: Historically, it has been, according to Carson Group's Ryan Detrick. Money market fund assets stood at $7.94 trillion for the week ended October 21, according to the Investment Company Institute, and Detrick says flows into money funds and cash-like ETFs are "the most we've ever seen" on a three-month basis. He says major surges into cash have usually come when the market tends to bottom. The caveat: some of that cash is simply earning yield and may stay put.

Drawing on The Pomp Podcast, hosted by Anthony Pompliano (anthonypompliano.com), with Ryan Detrick, Chief Market Strategist at Carson Group (episode released October 27, 2026).

Investors are parking money in cash at a remarkable pace. Total U.S. money market fund assets stood at $7.94 trillion for the week ended October 21, according to the Investment Company Institute. On The Pomp Podcast on October 27, Ryan Detrick, Chief Market Strategist at Carson Group, argued that this flight to safety is a reason to be more optimistic about stocks, not less. Here is his reasoning, the data behind it and the caveats.

Close to $8 trillion in money market funds alone. ICI reported on October 22 that total money market fund assets rose by $21.49 billion to $7.94 trillion for the week ended October 21. Government funds rose by $21.82 billion and prime funds by $3.23 billion, while tax-exempt funds fell by $3.56 billion. Weekly totals move around: assets were $7.96 trillion two weeks earlier, for the week ended October 7.

Detrick's point is about the pace of new money, not just the total. He told Pomp that on a three-month rolling basis, flows into money market funds and cash-like ETFs are "the most we've ever seen." In his October 27 note, he shared a chart from @MacroCharts showing "a huge move into money markets and cash-like ETFs."

Because cash finally pays, and other options have disappointed. Detrick said many investors were burned in high-flying stocks and in bonds, which have struggled as interest rates rose. "So people are kind of just like, you know what, give me cash," he said, describing the mindset as wanting to earn a yield on cash without "messing around" with bonds or stocks.

Bonds have had a rough stretch. Carson's Barry Gilbert wrote on October 21 that the Bloomberg U.S. Aggregate Bond Index fell 3.5% in the third quarter, its worst quarter since the fourth quarter of 2022, and was down 1.7% for the year as of October 20.

Historically, Detrick says, yes. Looking back at past major surges into money market funds and cash-like ETFs, he said: "That usually is when the market tends to bottom." In his note, he wrote that previous surges on the MacroCharts chart "have marked nice times to get long and expect a rally in stocks."

The logic is contrarian. When investors have already moved to safety, there are fewer sellers left, and that cash can come back into stocks once the mood improves. Detrick also pointed to heavy trading in inverse, or bearish, ETFs. "So the inner contrarian in me keeps kind of buzzing," he said.

Several, all cited in his October 27 note. According to Goldman Sachs, a basket of hedge funds' favorite longs against the most-shorted stocks fell 4.2% on October 22, the worst day since August 2011. Bloomberg noted hedge fund shorts were near a five-year high. And Goldman's Prime Book showed the most extreme selling of global equities since late March. For how that fits the calendar, see Is October Bad for Stocks?

Cash on the sidelines doesn't have to move into stocks. Detrick himself acknowledged in his note that "some of this could be because you can finally get something on cash and many are moving away from bonds." Much of the money in money market funds belongs to institutions using them to manage cash, not investors waiting to buy stocks: institutional funds held $4.83 trillion of the $7.94 trillion total, according to ICI. And money funds are earning a yield, so there is less pressure to move. Sentiment signals can also stay extreme for a while before markets turn.

Detrick's view is that the rush into cash looks like fear, and fear has historically been a better time to buy than to sell. The data on money fund assets is real and near $8 trillion. Whether it fuels a rally depends on what investors see next, especially from the Fed, tech earnings and the midterm elections. For a look at the election angle, see How Does the Stock Market Do After Midterm Elections?

Total U.S. money market fund assets were $7.94 trillion for the week ended October 21, 2026, according to the Investment Company Institute.

Ryan Detrick of Carson Group says major surges into money market funds and cash-like ETFs have historically come near market bottoms. But cash doesn't have to move into stocks, and much of it is held by institutions.

Cash is paying a yield, and many investors have been burned by stocks and bonds. Ryan Detrick says people are thinking, "you know what, give me cash."

A signal that suggests doing the opposite of the crowd. Heavy cash holdings, high short interest and bearish ETF trading can mean many investors have already sold, which some strategists see as bullish.

The Pomp Podcast is hosted by Anthony Pompliano and covers the future of business, finance and technology. The show features Pomp's conversations with founders, investors and economists about bitcoin, markets, AI and the economy. Follow The Pomp Podcast on X.

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This article reflects the opinions of the guests and host as shared on The Pomp Podcast. It is guest opinion, not investment advice. Do your own research before making any investment decision.