DIA closes out June with a quiet price gain masking a meaningful reversal in short positioning — the unwind flagged in last week's note has fully reversed, and bearish pressure on the Dow ETF is rebuilding.
The previous note described a decisive loosening in the borrow market, with availability rising to 224% as shorts retreated. That comfort has now tightened again. Availability has dropped back to 158% — a 30% fall on the week — after touching 290% on June 22, the loosest point in over a month. That swing from loose to tighter is the clearest signal in the data this week. Short interest has climbed 11.6% over the past seven days, reversing most of the prior week's unwind, and now sits at 6.4% of free float — the highest level in the 30-day lookback window. The month-on-month gain is 16.4%, suggesting the mid-May squeeze low of 4.5% availability was not a one-off outlier but part of a broader rebuilding trend in bearish positioning. Cost to borrow has moved with it, rising 55% on the week to 0.89% — still low in absolute terms for a large ETF, but the fastest pace of increase since late May.
Options tell a different story, and the contrast is worth naming. Put/call activity has become notably less defensive than usual — the PCR reading of 1.65 is well below its 20-day average of 1.77 and sits close to the 52-week low of 1.47. That puts the z-score at roughly -1.5, meaning options positioning is almost one-and-a-half standard deviations less protective than the recent norm. Shorts are adding exposure while options traders are reducing their hedges — an unusual divergence for an ETF that typically sees both move together.
The ORTEX short score has edged higher to 54.3 from 49.1 a week ago, when the previous note described a neutral setup. The score peaked at 56.9 on June 26, the same day availability was tightest at 83%, before easing slightly into quarter-end. That 56-57 range is elevated but not at an extreme — the score remains in the middle half of its range rather than signalling acute pressure. The broader price backdrop is benign: DIA added 1.1% on the week to close at $522.39, up 2.3% over the past month, as blue-chip industrials and financials provided a quiet tailwind into mid-year.
The institutional flow data shows Morgan Stanley as the largest holder at roughly 4.2% of shares, with a 708,000-share addition in Q1 — the biggest single-holder build in the top-fifteen. Millennium Management also added 124,000 shares in the same period. Jane Street, by contrast, cut its position by 577,000 shares. These are Q1 figures and may not reflect current positioning, but the pattern suggests active traders were on opposite sides of the same trade heading into the quarter.
The tension heading into July is whether the short rebuild has further to run or whether — as happened twice already this year — it stalls and reverses quickly. The pace of borrow tightening relative to the muted options hedging, and whether availability continues its drift lower, are the clearest gauges to watch.
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