Short Selling Points To Higher Prices

The 2X short-to-long buying ratio in ProShares inverse funds is about 1.4, a level that has often marked market bottoms over the past 15 years. Buying in 2X and 3X ProShares short funds versus longs has reached historically high levels, a pattern that typically precedes significant market rallies. This flow-based technical signal increases the probability of a near-term market rebound and suggests reviewing leverage and positioning accordingly.

Analysis

The 2X short-to-long buying ratio in ProShares inverse funds is about 1.4, a level that has often marked market bottoms over the past 15 years. Buying in 2X and 3X ProShares short funds versus longs has reached historically high levels, a pattern that typically precedes significant market rallies. This flow-based technical signal increases the probability of a near-term market rebound and suggests reviewing leverage and positioning accordingly.