Short interest in the Technology Select Sector SPDR Fund (XLK) has climbed to its highest level in more than six years, signaling growing bearish positioning against US large-cap tech.

Rising short exposure suggests that:

• many traders expect a correction in Big Tech
• positioning is increasingly one-sided
• downside consensus may already be crowded

However, elevated short interest also creates the conditions for a potential short squeeze, especially if:

• earnings surprise to the upside
• macro data supports risk assets
• yields stabilize or decline

When positioning becomes extreme, price moves can become asymmetric. If tech stocks start rising unexpectedly, forced covering could accelerate upside momentum.

For traders, the setup now is binary: either the correction materializes — or the market punishes crowded shorts.

Positioning is stretched. Volatility may follow.