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Investors Shunning Equities Set the Stage for Stocks’ Big Bounce

  • Retail investors are chasing gains in meme stocks, options
  • Hedge funds are forced to unwind short sales amid rally

Nobody saw it coming, and now everyone wants in.

That’s a nutshell synopsis of how an improbable equity market bounce is threatening to become a meltup. Hedge funds slashed stocks, mutual funds flocked to cash, and even hard-to-daunt retail traders reined in their glee, draining the market of sellers and creating a backdrop where the slightest good news forced everyone back.