Fast-money stock skeptics who got throttled in July are charging back undaunted.

Hedge funds that make both bullish and bearish equity wagers boosted short sales in eight of the 10 sessions through Monday, according to data compiled by Goldman Sachs Group Inc.’s prime brokerage unit. Halfway into August, the dollar amount of bearish wagers has already more than doubled the volume of positions covered in July, the firm’s team including Vincent Lin found.

Morgan Stanley’s securities lending desk saw an uptick in short sales this week, particularly among single stocks, with Wednesday and Thursday posting the second- and fourth-busiest session of the year, respectively.

While shorts often proliferate as markets fall, the swiftness with which they are being deployed now is notable. Hedge funds just finished a furious retreat from markets broadly, trimming longs and shorts in a process known as de-grossing that by one measure was the fastest since the retail-fomented short squeeze in 2021.

“Trading flows point to a reversal in trends,” Lin wrote in a note this week.

The data suggests another force behind the selloff pushing the S&P 500 toward its worst month of the year amid a run-up in bond yields.

Other widely cited culprits include traders in zero-day options and market markers whose shift in derivatives positioning turned them into a source of market turmoil.

Short sellers are surfacing as the S&P 500 is poised for its third straight weekly drop. The benchmark index is down 5% in August, while a basket of most-shorted stocks kept by Goldman has fallen 18%, handing profits to bears.

To bulls who watch sentiment for an inflection in market trends, the resurgent skepticism may be welcome news as it can set the stage for a bounce, as happened last October. Back then, almost everyone was prepared for a recession. Yet as economic and earnings data streamed in better than feared, stocks rallied, forcing investors of all strips to chase gains.

Whether the current bout of selling constitutes such a turning point is, of course, unknown. Flows into equity-focused exchange-traded funds have turned negative in the past week, data compiled by Bloomberg show. In a poll by the National Association of Active Investment Managers (NAAIM), equity exposure slipped from the highest since November 2021.

Yet all the exits lack the kind of urgency that have traditionally set the stage for a market bottom. Trading volume has stayed in line with 2023’s average. The cost of options, as indicated by the Cboe Volatility Index, has climbed from the year’s lows, but still remains below its long-term mean.

JPMorgan Chase & Co.’s prime brokerage unit observed a similar trend among their hedge fund clients, with flows turning to “modest” re-grossing. To the team including John Schlegel, it’s too early to call the all-clear.

“The markets could be somewhat weak for a little longer, given the recent drops follow very big increases” in positioning, they wrote in a note Thursday. “It’s not clear we’ve seen capitulatory selling.”

(Updates with Morgan Stanley data on short sales in third paragraph)