Short positions in the US stock market are approaching historical highs, and risk appetite within the market has significantly decreased According to data from S3 Partners, short positions in Russell 3000 constituent stocks account for nearly 6% of outstanding shares, and the S&P 500 has also risen to about 3.5%, both of which are near historical highs. Many people see that the short positions in the US stock market are getting higher and higher, and their first reaction is that the market is going to fall, but I don't think it's that simple. The increase in short positions only indicates that there are more and more funds who do not believe that the US stock market can continue to rise, and also shows that many funds have prepared in advance for the market downturn. However, opening a short position does not necessarily mean that the market will decline. Ultimately, it depends on the macroeconomic, economic, and monetary policy trends in the United States. If the economic data continues to weaken, corporate profits begin to decline, and the Federal Reserve has no room to relax, then the pressure on the US stock market will indeed increase. But if the data does not continue to deteriorate and the US stock market cannot continue to fall, the more short positions there are, the easier it is to become a driving force for the rise. Especially now that we are in the financial reporting season, the financial reports of heavyweight stocks will be released one after another starting today. If the data in the financial reports is very good, the revenue of AI related businesses continues to grow, and the demand for cloud computing and management's guidance for the future do not weaken, then the market's concerns about corporate profits will temporarily decrease. At this point, the US stock market doesn't even need much positive news. As long as the market continues to decline, bears will start considering closing positions. Because closing a short position is essentially buying. Short selling funds need to repurchase stocks in order to end the position, so the higher the short position, the more potential buy back opportunities. Once the stock price rises and causes some short positions to cut losses, short covering will continue to drive the stock price up, and ultimately may form a relatively obvious short squeeze. But conversely, if the financial reports of heavyweight stocks fall short of expectations, or if AI investment continues to increase but the speed of related revenue and profit realization cannot keep up, then these bears may have bet in the right direction in advance, and the decline of the US stock market may further accelerate due to the financial reporting season. So this earnings season not only determines whether a company's profits can support its current valuation, but may also determine whether these short positions, which are close to historical highs, will continue to make money or be forced to become fuel for the rise of the US stock market. @Gate Crypto、 US stocks, Hong Kong stocks, South Korean stocks, gold CFD、 Predicting one-stop trading in the market