XLC, the Communication Services Select Sector SPDR ETF, is now a week into a sustained bear retreat — and the data this week confirms the unwind is accelerating rather than pausing.
The clearest move is in short interest itself. Bears have cut their position by 16% over the past week, with shares short falling from a peak of 9.4 million on June 25 to 7.4 million as of July 7. That is the sharpest weekly reduction in the 30-day window. Over the past month, however, the overall position remains 53% larger than it was in late May — a reminder that the June buildup was substantial even if the unwind has been swift. The ORTEX short score has dropped from 54.9 on June 25 to 49.8 today, crossing back below the neutral 50 mark and suggesting the aggregate short-positioning signal has now fully reversed the squeeze-era pressure.
The borrow market tells the same story, but with an important nuance. Availability has widened dramatically — from a genuinely stressed 21.9% on June 25 to 128.8% now, meaning more shares are available to borrow than are currently borrowed. That is a healthy, workable lending environment. Cost to borrow has also eased, falling roughly 9% on the week to 1.35%, though it remains more than double the sub-0.6% levels that held through May. The 52-week minimum availability of just 2% — hit during the June squeeze — is now a distant data point rather than an active constraint. Borrow conditions have loosened materially, but the cost floor has reset higher than it was before the squeeze episode began.
Options positioning adds a layer of context that cuts against the improving borrow picture. The put/call ratio is running at 8.33, well above its 20-day average of 6.82 and near the upper end of recent ranges — though it is roughly one standard deviation above the mean rather than at an extreme. What is notable is the structural shift: through most of May and into early June, PCR was in the 7.5–7.8 range, then dropped sharply to 3.9–5.5 in mid-June as sentiment briefly brightened, before climbing back above 8 from June 22 onward. Options traders are hedging more heavily now than at any point since the early June optimism window closed. The 52-week high on PCR is 12.05, so current levels are elevated but not panicked.
Valuation data on XLC is flagged as stale — the most recent multiples reflect a September 2025 period-end — so it is not meaningful to lean on those figures in describing the current setup. What can be said is that the ETF is up 3.6% on the week to $111.02, recovering most of the modest 0.6% monthly loss, while the recent dividend history shows distributions of $0.28 in June and $0.36 in March, consistent with the sector's income profile.
The setup heading into next week is one where positioning has normalized — short interest is falling, borrow is open, and the squeeze stress of late June has fully cleared — but options traders are re-hedging more actively than they were a month ago. The next thing worth watching is whether the PCR continues to rise back toward its 52-week high of 12.05, or whether the price recovery absorbs the hedging demand and the ratio fades back toward its 20-day mean.
See the live data behind this article on ORTEX.
Open XLC on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
