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XLC, the Communication Services Select Sector SPDR ETF, closes the week in a notably different posture from where it stood seven days ago: the short squeeze that drove last week's note has decisively reversed.
The positioning picture has flipped. Last week's article flagged short interest jumping 70% in a week to roughly 8 million shares, with cost to borrow hitting a two-month high of 1.13% and availability collapsing to just over 100%. All three of those signals have since unwound. Short interest has fallen 22% over the past month, dropping back to around 6 million shares, or 2.7% of free float. That is a meaningful retreat from the 8-million-share peak seen in early October and broadly returns the position to late-September levels. The borrow market has eased just as quickly. Cost to borrow has halved over the past week, falling from above 1.13% to 0.51%, its lowest reading in the 30-day window. Availability has loosened from around 100% to just over 207%, meaning there are now roughly two shares available to lend for every share already borrowed. The ORTEX short score has also pulled back, from above 50 in early October to 41 now, consistent with a market that is no longer in a particularly charged short-side setup.
Options positioning tells a broadly neutral story rather than one of fresh conviction either way. The put/call ratio on XLC is running at 1.48, which sounds elevated in isolation, but is actually below its 20-day mean of 2.07 and only 0.4 standard deviations beneath it. The context matters here: the PCR spent most of September above 5.0, a period of intense put buying that has now clearly unwound. The ratio has been normalising steadily since late September. At current levels, options traders are positioned less defensively than they have been for most of the past six weeks.
The fund itself has posted a modest recovery. XLC closed at $112.28, up 0.6% on the week and 0.7% on the day, though still fractionally lower over the past month. Valuation data, while lagged to late September, puts the trailing P/E at around 19x and price-to-book at 2.9x. Neither multiple has moved dramatically in either direction over the 30-day window, though both are modestly higher over the month, in line with the sector's broad recovery from summer weakness.
What to watch next is whether the short-side retreat continues or stalls: the 30-day history shows shorts have oscillated between roughly 4.8 million and 8.4 million shares, and the current reading sits almost exactly in the middle of that range, leaving the direction of the next move genuinely open.
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 and reviewed by the ORTEX team. Content is informational only and does not constitute investment advice.
