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 advance/decline ratio looks at the percentage of stocks in an index that are rising compared to the number that are falling.

While the index has been flat the past few weeks, the advance ratio has been improving. Only A few names – notably Oracle – have been keeping a lid on markets.

A generation ago, a single income could support a family, buy a house and pay for a vehicle or two in the driveway.

Today, even two high earners are struggling to purchase a new home.

According to a recent report from Bankrate, a household earning $80,000 a year is now priced out of 75% of all new homes on the market. A family now needs to earn at least $113,000, and in some major metros, it’s closer to $200,000.

Meanwhile, the homeownership rate has slipped to a six-year low, with further declines expected next year. Families are being squeezed from every angle.

The point I want to make here is that the so-called affordability crisis isn’t just about the cost of homes or other assets. It’s about the cost of money.

In just the first two months of Fiscal Year 2026, the deficit already totals $458 billion — the second-largest start on record.

More troubling still, the net interest expense hit $179 billion, outrunning Medicare, defense, and healthcare. At this pace, interest will again be the fastest-growing line item in the federal budget.

At the absolute peak of the dot-com boom — routers stacked to the ceiling and PowerPoint masquerading as profits — Cisco’s market capitalization topped out at roughly 4.4% of U.S. GDP.

Nvidia today? Roughly 16% of U.S. GDP.

That’s not a rounding error.

Measured against the size of the economy, Nvidia is in a category Cisco never visited. Which means that any serious disappointment in the AI build-out would scale 2000–01 – geometrically.