I am only guessing, but my guess is that most shorts are part of...

I am only guessing, but my guess is that most shorts are part of an overall portfolio where someone holds both short and long positions at the same time. In effect that creates liquidity for them, which allows them to double their nett exposure (either long or short) quickly while changing just a small amount of either position. That is, actually, how the ASX justifies allowing short selling (as if false liquidity is a good thing!). You would set yourself up like that if you wanted to take advantage of some predicted volatility - perhaps caused by a stock’s possible dropping from the ASX200 - but doesn’t necessarily mean you know which way that volatility will swing from today’s price - just that you anticipate volatility. So you see shorts increasing regardless of whether the price is headed up or down, because they could be hedged mostly by long positions.