The Russell 2000 Index posted a 2.2% decline in May, its worst month since October, and it appears a large swath of investors is now betting it has further to fall.

As Bloomberg notes, hedge funds and other major speculators have a combined net short position of 73,030 contracts in the small-cap index’s futures, according to the latest data from the Commodity Futures Trading Commission.

Russell 2000 sentiment has sharply declined since January when future contract positioning reached record bullishness. It’s now the shortest since May 2011.

In the four months following the May/June 2011 peak in shorts, the Russell 2000 dropped almost 30%, as QE2 ended, as was only rescued by the unleashing of Operation Twist...

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And with the Fed balance sheet set to be 'normalized' and rate hikes coming no matter what, one wonders what would save stocks this time?