This morning saw the market open notably lower, however, as I type the S&P 500 is flirting with a positive print (was actually in the green solidly a half-hour ago), retracing virtually all of this morning's selloff. Yes, that was largely the result of shorts buying back those borrowed shares.
Macro strategist Cameron Crise agrees:
"It’s nice and everything that the SPX has rebounded from its session lows, but the internals bear all the hallmarks of short covering. The best performing sectors on the day -- financials and energy -- are the two worst performers this year. With the curve bull flattening and negative interest rates remaining in the price for next year, it’s hard to argue that there have been any positive developments to justify the BKX rising some 3% on the day."*BKX is the KBW Bank Index