Record short bets trapped as market hits all-time highs — ride the squeeze with SPY
Hedge funds have placed record bets that stocks will fall — but instead the market just hit all-time highs for three days straight on optimism about a U.S.-Iran peace deal. Goldman Sachs just raised its year-end S&P 500 target to 8,000.
Idea
When traders bet heavily against a market and it keeps going up anyway, they're eventually forced to buy back in to limit their losses — pushing prices even higher. That's the setup right now: short sellers have placed record wagers against stocks, yet the S&P 500 just posted three straight all-time highs. Goldman Sachs raised its year-end target to 8,000, citing booming earnings. Any further positive headlines on a U.S.-Iran deal could force those shorts to cover, creating an extra burst of buying pressure on top of an already strong rally.
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News sources
- Stocks just scored a trifecta of record closes for the first time in 2026. What to expect next. — MarketWatch
- Short Sellers Are Betting Record Amounts Against Stocks. But the Market is Rallying On a Potential Deal Between Trump and Iran. — Yahoo Finance
- Goldman raises its S&P 500 year-end forecast. It's for one simple reason — CNBC