Hedge funds are most bearish they've been on stock market since 2011

And the bearish positioning could ultimately provide a buffer for downside potential in stock prices in the near-term, according to Newton.

"I continue to feel that negative sentiment likely will help provide a cushion to any equity decline into the back half of the month of May which is when a few cycles show more convincing intermediate-term bottoms in the cycle composite," he said. offered a similar take on the hedge fund short data, noting that sentiment indicators like this often offer the best buy signal when they hit extremes and then reverse.

"Like any other sentiment indicator, net futures positioning's strongest message should come when it hits an extreme and reverses. Bullish macroeconomic or earnings reports could trigger a short squeeze. The lack of open interest could make it difficult for them to cover, if others do not increase their position sizes again," NDR said in a Wednesday note.

The catalyst to a potential short-squeeze, or bust, could come in a matter of days as publicly traded companies prepare for the release of their first-quarter earnings results, with mega-cap banks

Hedge funds suck lol

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Bets against U.S. stocks swell to highest level since 2011. History shows that’s actually good news for markets.Traders are growing increasingly confident that U.S. stocks are headed for a selloff, but history shows the opposite is more likely, according to one analysis. Lol… it depends on who is placing the bearish bets. Yeah. And from 2011-2022 we were in ZIRP, bubblicious fantasyland
Source: MarketWatch - 🏆 3. / 97 Read more »