The global market opening at 7:00 Beijing Time delivered a big surprise to the world: - Gold, silver, US stocks, and the US dollar all "gapped higher" on Monday—this is the "aftershock of liquidation." Funds that couldn't adjust their positions over the weekend were forced to manage risk in an instant at the open. The rise of the US dollar indicates that the market hasn't relaxed yet. Looking back at the core of this recent plunge, it's not due to deteriorating fundamentals but an epic "forced deleveraging." The first to blow up were software stocks (the easiest target for hedge funds), and fund managers' first reaction wasn't to judge right or wrong but to "stay alive." They immediately sold the most liquid assets regardless of their holdings or prices (a very aggressive move). The sequence of the crash was: software—gold, silver—Bitcoin—semiconductors—finally even "safe havens" like GOOGL and AMZN were sold. This was a "cross-asset, cross-strategy, synchronized deleveraging." Each deleveraging cycle followed a highly consistent order: the most crowded, most leveraged, and most liquid assets. 1. What truly sends chills down people's spines is another matter: short selling has reached a historic level. Goldman Sachs provided a very alarming figure: hedge funds have been net sellers of US stocks for four consecutive weeks, with the fastest shorting pace since the liberation day, far surpassing their long positions (2.5:1). The "nominal short volume" of individual US stocks hit a record since 2016 (+3.2σ). This is not a small or localized phenomenon—it's a historic level of shorting. 2. Why did the market suddenly surge on Friday? Goldman Sachs' trading desk discovered something: IGV (software ETF) experienced genuine, institutional-level buying. ETF shares surged by 12% in a single day, marking the largest increase in 2023—this wasn't retail bottom-fishing but large funds covering their short positions. 3. Is this a reversal? Goldman Sachs said something very valuable: Friday's rebound only absorbed about 20% of the short positions. In other words, shorts are still in place, leverage remains high, and the market is still crowded (20% is "stopping the bleeding," not "healing"). The most dangerous moment has passed, but the market is still in a "touchy" state. There are two possible scenarios next: · Either, shorts refuse to accept defeat and continue adding to their positions, with even a slight positive trigger causing a full squeeze; · Or, volatility slows down, the market diversifies, and the market shifts from "teenage out-of-control" to "mature pricing." What is certain is that the indiscriminate, destructive sell-off is rapidly decreasing in probability. The market bottom has never been because "everyone has come to terms," but because those who need to sell have already sold out.