Given increasing doubts on the recent stocks rally, selling at its peak might be appropriate.
Short sellers have revived their wagers against the stock markets in recent weeks, taking their most aggressive positions in years.
Bets against the SPDR S&P 500 (NYSE:), the biggest exchange-traded fund tracking the broad index, rose to USD68.1 billion last week, the highest level in data going back to January 2016, according to financial analytics company S3 Partners. That was up from USD41.7 billion at the beginning of 2020 and USD41.2 billion a year ago.
Those bets are a result of a wild year for investors who are struggling to reconcile the impact of the coronavirus pandemic on the population and economy. The suffered its fastest drop into a bear market in history — ultimately falling 34% between 19th Feb and 23rd March. Its 28% rebound since then has also been brisk, leaving some investors anxious about the strength of the rally when so much unknown remains.