The CNN Fear and Greed Index dropped to an extreme reading of 9 — its lowest since November — as short interest across Russell 3000 stocks hit a 15-year high of 4.3%, signaling that bearish positioning on Wall Street has reached levels not seen since major market crises.
Russell 3000 Short Interest
Data compiled by The Kobeissi Letter shows bearish bets are piling up across multiple asset classes at once. Median short interest in Russell 3000 stocks now sits a full percentage point above the 2022 bear market peak.
The energy sector stands out even more. Short interest in the State Street Energy Select Sector SPDR ETF (XLE) has climbed to its highest level since the 2008 financial crisis.
"Short interest in the sector has DOUBLED over the last few weeks, posting its most rapid jump this century," The Kobeissi Letter wrote.
Put options volume on the State Street SPDR S&P 500 ETF Trust (SPY) spiked to 8.6 million contracts. That figure matches the highest since the Apr. 2025 tariff shock known as "Liberation Day."
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Kobeissi Letter Analysis
The ratio of leveraged long-to-short ETF trading volume has fallen to roughly 1.1. "This means trading activity in leveraged short ETFs is now nearly equal to that of leveraged long ETFs," the analysts noted.
That ratio stood at 3.0 in October when bullish bets dominated.
It now approaches levels last seen during the 2022 bear market and the 2020 pandemic sell-off. "By comparison, this ratio fell to 0.4 at the 2008 Financial Crisis bottom, meaning short ETF trading volume exceeded long ETF volume by ~150%," The Kobeissi Letter added.
The convergence of extreme readings across sentiment gauges, short interest, options hedging and ETF flows raises a contrarian question.
When positioning becomes this one-sided, markets have historically reversed sharply in the opposite direction.
Still, the sheer scale of bearish positioning — from a 15-year high in Russell 3000 short interest to near-parity in leveraged ETF trading volume — suggests that institutional investors are bracing for further downside rather than betting on a quick recovery.
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