One of the largest short positions in US stock history. If geopolitics cool, April could snap hard. | ★ ELITE MARKET POINT | | Strength through knowledge | | Finance Intelligence Brief | The most crowded short
in years. | | Citadel Securities’ Scott Rubner says US equities are sitting on one of the largest short positions on record. If geopolitical tensions ease, April could produce a sharp move higher. |
| The Brief Three Numbers That Matter Everyone is betting against US stocks. The data says that is exactly when you should pay attention to the upside. | | 1. Short bets on US equities have reached one of the highest levels ever recorded, according to Citadel Securities’ Scott Rubner. Hedge funds, systematic strategies, and institutional investors have all been piling into the same side of the trade. That kind of crowding creates fuel for a violent reversal if any positive catalyst arrives. | | | | 2. Investor sentiment has collapsed. The CNN Fear & Greed Index dropped to 15 — down roughly 50 points from January. The AAII Bull/Bear spread hit its lowest reading in three months. When this many people are defensive at once, markets tend to move the other way. | | | | 3. Retail investors are still buying. Every single week in March, retail has been a net buyer of US equities on Citadel Securities’ platform. On down days, retail buying has been running 2.5x larger than on up days. The “dumb money” is quietly accumulating while institutions hedge. |
| Details The Forces Driving Finance | | Positioning / Macro Dashboard | | Rubner’s April Setup: Why the Snap Could Be Violent | Last edition, we laid out the macro trap: the Fed stuck between inflation and a softening labor market, oil doing the tightening. That backdrop pushed positioning deeply bearish. Now the question shifts to what happens when the pressure valve releases.
Scott Rubner has studied market flows and positioning for over 20 years, first at Goldman Sachs, now as head of equity and equity derivatives strategy at Citadel Securities. His track record includes calling both major 2024 corrections and the November rally that followed. When Rubner talks positioning, the Street listens.
His latest note, published this week, lays out an “April Capitulation Checklist.” The argument is straightforward: the technical headwinds that dragged markets lower in February and March are clearing. About 35% of all US options exposure expired by March 20 — the largest March expiration on record. That removes a mechanical constraint that had been forcing dealers to sell into rallies. With that pressure gone, the path higher gets easier.
Add the sentiment collapse. The S&P 500 options skew hit the 98th percentile over the past five years — meaning demand for downside protection is at extreme levels. That much hedging creates a coiled spring. When the hedges get unwound, the buying can be fast and indiscriminate.
Seasonality supports the case. Since 1928, April has been the second-strongest month for the S&P 500, with gains in 63% of years and an average rally of 4.3% in positive months. Most of that strength is front-loaded into the first two weeks. Tax refund season adds another tailwind — roughly 53% of annual refunds are issued by April 1, putting cash directly into consumer and investor hands.
Rubner is clear about the condition: geopolitical tensions must ease. If the Strait of Hormuz reopens and oil pulls back, the short covering could be explosive. Monday offered a preview — when Trump suggested “productive conversations” with Iran, markets surged immediately as shorts scrambled to cover. If that dynamic plays out over weeks rather than hours, April could produce one of the sharpest rallies of the year.
He is also clear about what this is not: a “buy everything today” call. The broader capitulation process is not fully complete. But the balance of risk, in his view, has tilted meaningfully toward the upside.
Our read: Rubner’s positioning data is among the best on the Street, and his framework has been right more than wrong. The setup favors investors who are prepared to add exposure if geopolitical headlines improve — particularly in large-cap US tech and quality names, where the Q2 flow rotation tends to concentrate. Do not front-run a ceasefire that may not come. But have a plan for what to buy if it does.
What to watch: Iran-US diplomatic signals remain the primary catalyst. If the Strait of Hormuz begins reopening, oil drops, and front-end rates ease — that is the trigger. Watch for systematic strategies flipping from sellers to buyers. Rubner says they are close to that threshold. When they turn, they do not turn slowly. |
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