Surge In Short Selling Has Goldman Prime Predicting Imminent Painful Squeeze

One week ago, Goldman derivatives guru Brian Garrett pointed out that it had been nearly 100 sessions since the market had suffered a 1.5% selloff, the longest such stretch since the VIXtermination ETN crash of Feb 2018 that sent the VIX from record lows to the 40s in the span of a few seconds. Alas, that streak - the 4th longest in recent history - is now over, thanks to Powell's unexpectedly hawkish post-FOMC presser which saw the S&P dump 1.6% on Thursday, and also drop on 5 of the past 6 sessions (assuming we close red today).

surge in short selling has goldman prime predicting imminent painful squeeze

To be sure, hedge funds have noticed the recent downward in risk, and in his follow-up report note published overnight (available to pro subs) Garrett writes that according to the latest Goldman Prime Brokerage data there has been a sharp reversal in bullish sentiment toward US Equities, with net exposures “falling sharply from year to date highs"...

Authored by Tyler Durden via ZeroHedge September 22nd 2023