Wall Street Is Crowding Into Crash Bets as Bearish Sentiment Deepens

Wall Street is flashing deepening bearish sentiment, and several other metrics again it up. The CNN inventory market Fear and Greed Index plunged to an excessive studying of 9.

This marked its lowest since November. The studying suggests a pointy deterioration in investor sentiment.

Follow us on X to get the newest information as it occurs

Data compiled by The Kobeissi Letter additionally reveals that bearish positioning has reached high ranges throughout a number of asset lessons concurrently.

Median quick curiosity in Russell 3000 shares has climbed to 4.3%. That marks the best degree in 15 years and sits a full percentage point above the 2022 bear market peak.

The vitality sector tells an much more dramatic story. Short curiosity within the State Street Energy Select Sector SPDR ETF (XLE) has surged to its highest since the 2008 monetary disaster. 

“Short curiosity within the sector has DOUBLED over the previous few weeks, posting its most fast soar this century,” the post learn.

Furthermore, put choices quantity on the State Street SPDR S&P 500 ETF Trust (SPY) spiked to eight.6 million contracts, the highest since the April 2025 “Liberation Day” tariff shock.

The Kobeissi Letter additionally flagged a decline within the ratio of leveraged long-to-short ETF buying and selling quantity. The ratio has fallen to roughly 1.1.

“This means buying and selling exercise in leveraged quick ETFs is now practically equal to that of leveraged lengthy ETFs,” the analysts famous.

Notably, this ratio stood at 3.0 in October when bullish bets dominated. It now approaches the 2022 bear market and 2020 pandemic lows. At the time, traders had been closely positioned for additional declines. 

“By comparability, this ratio fell to 0.4 on the 2008 Financial Crisis backside, that means quick ETF buying and selling quantity exceeded lengthy ETF quantity by ~150%,” The Kobeissi Letter added.

The convergence of maximum readings throughout sentiment, quick curiosity, choices hedging, and ETF flows raises a contrarian query. When positioning turns into this one-sided, markets have traditionally confirmed weak to sharp reversals in the wrong way. 

However, whether or not that sample holds amid escalating geopolitical tensions and mounting macro headwinds is way from sure

The publish Wall Street Is Crowding Into Crash Bets as Bearish Sentiment Deepens appeared first on BeInCrypto.