US Equity L/S: The Short Squeeze Puzzle of January 2026
Heading 1
Heading 2
Heading 3
Heading 4
Heading 5
Heading 6
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.
Block quote
Ordered list
- Item 1
- Item 2
- Item 3
Unordered list
- Item A
- Item B
- Item C
Bold text
Emphasis
Superscript
Subscript
When market optimism runs high, the lowest-quality stocks can suddenly look like the best performers. That’s exactly what’s happening in early 2026.
Since the Fed’s dovish pivot in late November, Goldman Sachs’ “Most Shorted” basket has surged +22%, while its high-quality “VIP” hedge fund favorites gained only +10%.
In other words, the most heavily bet-against stocks have beaten the market’s darlings by 10 percentage points in less than two months.
Why? Because low-quality, heavily shorted stocks thrive when:
• Equity and bond volatility falls
• Credit spreads tighten
• Inflation expectations drop
• Sentiment turns optimistic
And all of those conditions have been in place since November.
Continue reading our analysis by downloading the PDF below
Related Articles
Underweight Tech. Still Long AI
.jpg)
Small Caps vs Big Tech: The Rates Problem, Dissected
Credit Widened 55bp. Equities Are Only Now Listening
Oil Spike: Which S&P 500 Sectors Were Actually Macro?