Wall Street Is Crowding Into Crash Bets as Bearish Sentiment Deepens

Wall Street is showing deepening bearish sentiment, with the CNN Fear and Greed Index hitting an extreme reading of 9, its lowest since November. Data compiled by The Kobeissi Letter indicates high bearish positioning across multiple asset classes simultaneously. Median short interest in Russell 3000 stocks reached 4.3%, the highest level in 15 years and above the 2022 bear market peak. The energy sector shows extreme bearishness, with short interest in the XLE ETF doubling in recent weeks to its highest level since the 2008 financial crisis. Furthermore, put option volume on the SPY ETF spiked to 8.6 million contracts, the highest since April 2025. The ratio of leveraged long-to-short ETF trading volume has fallen to approximately 1.1, nearing 2022 and 2020 lows, suggesting trading activity in short ETFs is nearly equal to long ETFs. This extreme one-sided positioning historically suggests vulnerability to sharp reversals, though current geopolitical and macro headwinds make this uncertain.

(Source：BeInCrypto)