Goldman Sachs Flags "Short Squeeze Risk" as Hedge-Fund Short Positions Hit a Five-Year Extreme

A short squeeze may be brewing in U.S. stocks. Hedge-fund short positions on Goldman Sachs' books are higher than 99% of readings over the past five years, prompting the bank to flag a "short squeeze risk."
Funds sold $5 of stocks short for every $1 they bought this month, while fundamental long/short funds cut net bullish exposure to a near three-year low.
A setup for a sharp squeeze could emerge if strong earnings or other positive news force short sellers to buy back shares, accelerating a rebound.