Everyone Just Turned Bearish At Once—Upside Is Now The Main Pain Trade

The squeeze setup

The crowd has turned aggressively bearish just as markets are finding a bid. Positioning has been cut, fear remains elevated and volatility has been crushed. Add supportive seasonality, and the ingredients for a painful upside squeeze are falling into place.

If the rebound gains momentum, cheap convexity may be the cleanest way to play it.