Hedge funds are the most bearish they've been since 2011, and that could set the stock market up for a massive short squeeze

• Hedge funds have their biggest short position on the stock market since 2011, according to CFTC data.
• The massive short bet comes amid concerns of a potential recession and decline in corporate earnings.
• "Bullish macroeconomic or earnings reports could trigger a short squeeze," said Ned Davis Research.

Hedge funds have built their biggest collective short position against the stock market since 2011, according to recent data from the Commodities Futures Trading Commission.

There is a net short of -321,000 contracts on the E-Mini S&P 500 futures held by "Large Speculators," which is typically viewed as being hedge funds.