A Squeeze For the Ages

For the past few years, stocks with heavy short interest have, on average, performed better than stocks with average levels of short interest.

This year, the trend has gone into overdrive:

Turn Your Images On

Heavily shorted stocks continue to outperform the market. (Source: OnondaCapital via X)

Sophisticated investors “short” stocks because they make money when the price of the stock falls. Stocks with poor fundamentals and high valuations make good “short” targets. There are a lot of those in the market right now.

The squeeze: If you’ve shorted a stock but the price rises, instead of falling, you have to buy the stock at the higher price to close the position. It’s called a “short squeeze.” Investors in a short squeeze lose money even while the stock price rises.

If the squeeze is on across the market, companies with poor fundamentals can post huge price gains, driven by short-sellers closing out their positions.

Your eyes aren’t deceiving you. Right now, the worst stocks are the ones dragging the market higher. It’s another “feature” of the terrifying bull market underway today…

~ Addison

P.S. Our latest research with Ian King regarding Dollar 2.0, will appear later today in a special edition of Grey Swan Live!

The next regulatory environment for stablecoins favors three companies. We expect they will dominate the new monetary system as Trump guides digital assets into the mainstream.

Our estimate? $20 trillion will migrate to these platforms. That’s a positive Grey Swan event, if there ever was one.

Get ready – this latest research comes out this afternoon.

This is nearly your last chance. To receive our Dollar 2.0 research, please add your info here .

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

For the past few years, stocks with heavy short interest have, on average, performed better than stocks with average levels of short interest.

This year, the trend has gone into overdrive:

Turn Your Images On

Heavily shorted stocks continue to outperform the market. (Source: OnondaCapital via X)

If the squeeze is on across the market, companies with poor fundamentals can post huge price gains, driven by short-sellers closing out their positions.

Your eyes aren’t deceiving you. Right now, the worst stocks are the ones dragging the market higher. It’s another “feature” of the terrifying bull market underway today…

~ Addison

P.S. Our latest research with Ian King regarding Dollar 2.0, will appear later today in a special edition of Grey Swan Live!

The next regulatory environment for stablecoins favors three companies. We expect they will dominate the new monetary system as Trump guides digital assets into the mainstream.

Our estimate? $20 trillion will migrate to these platforms. That’s a positive Grey Swan event, if there ever was one.

Get ready – this latest research comes out this afternoon.

This is nearly your last chance. To receive our Dollar 2.0 research, please add your info here .

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

The stock market “rebalancing” is a polite way to put it. Energy and health care are getting a healthy boost. But tech hardware and software makers are still getting dressed down and have been asked to report to the principal’s office.

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Goldman Sachs told its own traders to be aware that institutional trading activity resembles a VIX reading near 35. Rather than a reading of 20, where the VIX has been trading over that same 2-month period.

The U.S. software ETF, IGV, tested its April 2025 lows last week and trades roughly 35% below its peak. The “SaaS-pocalypse” in software companies reflects the fear of Citrini’s 2028 scenario happening in real time. That divergence now exceeds the spread seen at the peak of the Great Financial Crisis.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

Despite its overly-educated 40-million-plus population, on a GDP per capita basis Canada is null. Collectively, the Great White North would rank as America’s second-lowest state, coming in above Mississippi, but below Alabama.

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!