Why The Non-Stop Squeezes: Stubborn Hedge Funds Are Most Short The S&P In 12 Years

Tyler Durden's Photo
by Tyler Durden
Tuesday, Apr 11, 2023 - 02:25 PM

One week ago, JPM's closely followed Market Positioning team warned that risks were growing for a "Marketwide Short Squeeze Amid Stubbornly Dismal Sentiment" with the bank's John Schegel saying that "March was in some ways the mirror opposite of February.  Unlike the elevated bullishness that was evident in early Feb, the bearishness that started in late Feb continued into mid-March, before a reversal took hold.  For the most part, flows and positioning saw similar reversals and ended the month at more neutral levels.  However, given the propensity for the pendulum of sentiment and flows to swing beyond neutral, it wouldn’t be surprising to see the recent rally extend further, perhaps with US High SI stocks catching more of a bid."

One look at the Goldman index of most shorted stocks shows that this is precisely what happened, if not yet to the same extent seen in March.