Wall Street is flashing deepening bearish sentiment, and several metrics back it up. The CNN stock market Fear and Greed Index plunged to an extreme reading of 9.
This marked its lowest since November. The reading suggests a sharp deterioration in investor sentiment.
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Data compiled by The Kobeissi Letter also reveals that bearish positioning has reached high levels across multiple asset classes simultaneously.
Median short interest in Russell 3000 stocks has climbed to 4.3%. That marks the highest level in 15 years and sits a full percentage point above the 2022 bear market peak.
The energy sector tells an even more dramatic story. Short interest in the State Street Energy Select Sector SPDR ETF (XLE) has surged to its highest since the 2008 financial crisis.
“Short interest in the sector has DOUBLED over the last few weeks, posting its most rapid jump this century,” the post read.
Furthermore, put options volume on the State Street SPDR S&P 500 ETF Trust (SPY) spiked to 8.6 million contracts, the highest since the April 2025 “Liberation Day” tariff shock.
The Kobeissi Letter also flagged a decline in the ratio of leveraged long-to-short ETF trading volume. The ratio has fallen to approximately 1.1.
“This means trading activity in leveraged short ETFs is now nearly equal to that of leveraged long ETFs,” the analysts noted.
Notably, this ratio stood at 3.0 in October when bullish bets dominated. It now approaches the 2022 bear market and 2020 pandemic lows. At the time, investors were heavily positioned for further declines.
“By comparison, this ratio fell to 0.4 at the 2008 Financial Crisis bottom, meaning short ETF trading volume exceeded long ETF volume by ~150%,” The Kobeissi Letter added.
The convergence of extreme readings across sentiment, short interest, options hedging, and ETF flows raises a contrarian question. When positioning becomes this one-sided, markets have historically proven vulnerable to sharp reversals in the opposite direction.
However, whether that pattern holds amid escalating geopolitical tensions and mounting macro headwinds is far from certain
