Stock Rally Follows Biggest Hedge-Fund Shorting Binge Since 2008
- Most-shorted stocks outperform market during Tuesday’s bounce
- ‘Rallies can be rented but not owned,’ warns David Rosenberg
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Who knows why stocks picked Tuesday to surge. But one fact to consider is the immense bout of short selling that went on last week.
Hedge funds tracked by Goldman Sachs Group Inc. doubled down on bearish wagers, with the dollar amount of short sales hitting the highest level since the 2008 financial crisis. Similar trends were on display at prime broker units of Morgan Stanley and JPMorgan Chase & Co., where bearish positions increased among clients.