🚀📊🔥 Crowded Shorts, Relentless Momentum and a Market Stress-Testing Bear Conviction 🔥📊🚀

$iShares Russell 2000 ETF(IWM)$ $S&P 500(.SPX)$  $Invesco QQQ(QQQ)$  26 Dec 2025 🇺🇸 | 27 Dec 2025 🇳🇿

One of the most persistent and under-appreciated positioning imbalances I’ve seen in years is now developing across U.S. equities.

Short interest is rising across small caps, mega-cap tech, and the S&P 500 simultaneously, yet price continues to hold and grind higher.

📉 Short Interest Is Rising Everywhere, Not Selectively

Short positioning has pushed into the 100th percentile across Russell 2000 constituents versus both the past 1Y and 5Y. Exposure is now up +45% in 2025 and +23% over the last 12 months. This is no longer tactical hedging. It reflects a broad, consensus macro bet against equity upside.

📈 Small Caps Are Absorbing Supply, Not Breaking Down

Despite historic short interest, $IWM continues to grind higher. Long-term data shows total short interest climbing steadily since 2022, yet price has stabilised, absorbed supply, and begun leaning higher again. When positioning expands while price refuses to confirm, asymmetry quietly shifts against the shorts.

🧭 $IWM Structure Signals Acceptance at Higher Levels

The 4H structure remains constructive. Price is consolidating within the upper Keltner and Bollinger envelopes rather than rejecting from them. The EMA stack remains supportive, and pullbacks continue to hold above prior value. This is acceptance, not distribution. Shorts do not require a breakout to feel pressure, time and carry are already working.

📉 Mega-Cap Shorts Are Crowding In as Well

The same behaviour is visible in technology. Short interest on $NDX stocks has jumped again, now up +3.9% since the last report, +30.8% in 2025, and +14.4% over the past 12 months. Positioning now sits in the 100th percentile versus both the last year and five years. Meanwhile, $QQQ continues to push higher. Chasing mega-cap momentum from the short side has historically been a dangerous trade.

🧠 Near-Term Compression, Not Deterioration

From a tactical perspective, $QQQ is consolidating just below the risk trigger while the lower band continues to trend higher. This configuration reflects compression rather than rejection, with downside risk being absorbed as support rises beneath price.

🏛️ $SPX Shorts Are Expanding Into Strength

Short interest in the S&P 500 is also accelerating. Exposure is up +2.45% since the last report, +45.3% in 2025, and +22.1% over the past 12 months. Price is rising while shorts are adding. Historically, this configuration has applied pressure to bears, not bulls. Even on quieter sessions, $SPX remains the greenest it has been in weeks.

⚡ Volatility Is Being Accumulated, Not Feared

The VIX tape reinforces this view. Over $3.8M in single-leg call premium traded today, filtered for A and AA quality, while spot VIX sits near cycle lows. This is not panic hedging. It reflects disciplined convexity accumulation. Equity exposure is being held, while insurance against a positioning-driven volatility snap is quietly added.

📊 Momentum Is Rare, Not Accidental

The broader regime matters. The S&P 500 is closing out December with its strongest weekly performance in over a month and remains on pace for an 8th consecutive monthly gain. That degree of persistence has occurred only a handful of times since WWII. Late-cycle momentum does not eliminate risk, but it does change who carries it.

🎯 Why This Matters Into Year-End and Beyond

This is not a single-session observation. It is a structural positioning imbalance spanning indices. Crowded shorts, improving structure, persistent momentum, and cheap volatility create a fragile equilibrium. If prices continue to hold and grind higher, the probability of forced covering rises materially as we move into early 2026.

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Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀

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