Tech led the latest swings on Wall Street Thursday, with Nvidia Corp. falling as much as 5.8% to drag the Nasdaq 100 lower by more than 2%. The index recovered as the session wore on, though, ending the day down 1.2%.

The signs of fatigue in stocks are emerging after months of steady gains. Now, choppy price action, weakening market internals and wild intraday swings have eroded the trend signals many models rely on. Breadth metrics in US stocks such as up volume versus down volume and new highs versus new lows are weighted alongside momentum and trend signals.

The set up for the quantitative models is likely exacerbating the swings, particularly to the downside.

Month-to-date exposure to US equities among systematic strategies has turned negative, data from the trading desk at Goldman Sachs Group Inc. show. Demand for downside protection has surged in recent weeks, the bank’s traders wrote in a note Wednesday, and trend-following models tied to the S&P 500 tend to flip into selling mode if the markets are flat or falling, according to trading-desk estimates.

“Over the last few weeks we have witnessed an extreme demand for hedges across our client base,” Goldman’s traders wrote. “It continues to feel like investor frustration has been building in recent days and weeks around the narrow nature of the long book given ‘inconsistent’ market narratives and price action.”

Gold, which has long been seen as a hedge against macro uncertainty and equity drawdowns, fits into the defensive play of many tactical strategies. Its astronomical rise past $5,000 an ounce has padded many portfolios as US stocks wobbled, but volatility has also found its way to that normally staid asset.

Jackie Rosner, a managing director, at PAAMCO Prisma who allocates money across hedge funds strategies including systematic ones, said gold could hit $6,000 or more this year.

“Gold remains structurally under-owned by institutions despite its recent rally. Allocations are still below levels seen 15 years ago, leaving significant room for reweighting if macro uncertainty persists,” Rosner said at iConnections Global Alts conference. “Speculative positioning isn’t stretched, retail participation remains relatively muted, and systematic trend-followers are aligned with the move.”

For now, ditching equities and piling into gold has produced strong results. McElhenny Sheffield Capital Management has generated a 4.35% return this year.

“If the market re-establishes a broad uptrend, we’ll participate,” Morris said. “But until the data confirm that, we’re comfortable sitting in defense.”

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