samedi 1 mars 2014

Short Interest Surges To New High

Incredibly, the recent short interest data showed the total cumulative short interest on SPX components surged 4% to it’s highest point since mid-2012.


We keep hearing how there are signs of ‘froth’ and everyone is bullish.  I don’t totally agree, but there are some warnings signs – sure.  Yet, when I see the shorts continue to pile on, I find that very bullish.
Let’s get one thing straight, those shorts very well could just be hedges and not outright bearish plays.  None the less, keeping things very simple, going back the past few years – high short interest hasn’t been bearish.  Late 2011 and Summer 2012 were great times to stay long.  They were also the last two times short interest was this high.  Could it happen again?  I wouldn’t bet against it.
Considering the last time short interest was this high the SPX was around 1,350 (or 37% ago), that very well could represent some major potential buying pressure for this rally to continue.

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