Wednesday, March 25, 2009

Early March Saw Largest Increase In Short Interest In 9 Months

According to data from TrimTabs, the first half of March (March 2- March 13) saw $15.78 billion in new short positions opened in the Russell 3000, resulting in aggregate short interest of 14.28 billion shares or a total of $227 billion in short positions (2.92% of Russell 3000 market cap) at March 13, from 12.84 billion shares or $203 billion on February 27. This has been the largest increase in short interest since June 2008. It is not surprising the that most sectors were financials and information technology as new bears were jumping on existing downside rallies and also expressing a bearish opinion to previously resilient sectors. 

As fast short money entered the easy short trade in droves during the first half of March, it has seen major pain and its unwind has swept additional incremental shorts to cover. The next relevant datapoint will be the short interest released in two weeks which will demonstrate just how critical the short squeeze has been in the recent market upside. 

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In Debt We Trust said...

Short interest information is old news. This information was accurate when SPX was 666.

Those shorts have since been
squeezed ... rather painfully.

Anonymous said...

i think that's the point though. that these shorts were added near the lows, and thus the recent rally is in large part due to weak hands getting SQUUUUUUUUUUUEEEEEEEEEEEZED

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