It appears the bears have almost fully "thrown in the towel" as short interest in the US equity market's most liquid ETF has tumbled to its lowest since May 2007.

In fact, the last time shorts were this dis-spirited was just as the S&P 500 began its rounded top and freefall from a previously "permanently high plateau."

(Click on image to enlarge)

(we note that these numbers are for late-March and today we will see the mid-April levels for short interest)

Along with the collapse in VIX (as hedges are unwound), one might wonder where the ammunition for the next short-squeeze leg higher will come from?