Short Interest Doubles, Fear Index Hits 9: When Wall Street's Doom Trade Gets So Crowded Even the Bears Need a Bigger Cave

Wall Street has apparently decided that being a bear wasn't enough—now everyone's trying to out-bear each other in a race to the bottom that's getting genuinely impressive in its enthusiasm.

The CNN Fear and Greed Index dropped to a reading of 9, its most terrified posture since November. For those playing along at home, that's not "cautiously pessimistic"—that's full tinfoil hat energy, maximum doom spiral, "the economy is a scam and so is everything else" vibes.

According to fresh data from The Kobeissi Letter, bearish positioning has reached levels that would make even the most hardened permabears nod approvingly. Median short interest in Russell 3000 stocks has climbed to 4.3%—the highest in 15 years and a full percentage point above where we were during the 2022 bear market, which, reminder, absolutely nobody saw coming. Except they definitely did. Every single person on Twitter called it.

The energy sector is where things get really spicy. Short interest in the State Street Energy Select Sector SPDR ETF (XLE) has surged to levels we haven't seen since 2008, back when the financial system was having its little meltdown and everyone thought Bitcoin might save us. "Short interest in the sector has DOUBLED over the last few weeks, posting its most rapid jump this century," The Kobeissi Letter noted, because apparently doubling down on pessimism wasn't just a metaphor anymore.

Meanwhile, put options volume on the State Street SPDR S&P 500 ETF Trust (SPY) spiked to 8.6 million contracts—the highest since April 2025's "Liberation Day" tariff shock, which was fun for everyone involved. Really brought the family together over dinner.

The analysts also flagged a decline in the ratio of leveraged long-to-short ETF trading volume, now sitting at approximately 1.1. "This means trading activity in leveraged short ETFs is now nearly equal to that of leveraged long ETFs." For context, this ratio stood at 3.0 in October when bullish bets dominated, and it now approaches the 2022 bear market and 2020 pandemic lows. During the 2008 crisis bottom, this ratio fell to 0.4, meaning short ETF volume exceeded long volume