Flip the gate:
No catalyst
Catalyst fires
A crowded short pool only squeezes when a catalyst opens the covering feedback loop
Short interest builds in an index trading above rising trend lines; a catalyst gate decides whether that latent pool turns into a run-away covering loop (squeeze) or stays dormant (no squeeze).
price (index ETF + basket)
intermediate trend line
long-term trend line
shorts add above a rising tape
short interest pool
latent covering demand
catalyst gate
relief · breakout · covering
marginal shorts cover
covering lifts price → forces more covering (positive feedback)
squeeze
no trigger fires
price stalls
pool stays latent
no squeeze · price stalls
No trigger — pool stays latent, price stagnates or rolls over
Trigger — covering loop runs away into a squeeze