The 7-year auction on August 27 drew a D grade, with the foreign bid at 60.78%, the weakest in months. Leveraged funds are stretched on both sides: yen shorts sit at their rarest since 2026, Russell 2000 shorts rank in the bottom 2% of two-year readings, and elevated sentiment signals doubled to 12 from 6. The FOMC meets in 10 days: if the Treasury needs more from a thinning foreign bid while positioning is this crowded, the auction breaks before the meeting does.