Posts filed under “Trading”

Qs Short Interest

Mike Panzner notes:

The short interest ratio (outstanding short positions dividided by average daily  volume) for the Nasdaq-100 Index Tracking Stock ("QQQQ," or "Qubes") is at its lowest level since the 3-year old bull market began, a possible contrarian signal suggesting that the bears have thrown in the towel.


click for larger chart

Qqqqsir

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UPDATE:  March 14, 2006 2:18pm

Yes, this is a longer term Bearish contrary indicator. Rallies very often get started via short covering rally — no shorts, less rally . . .

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UPDATE 2:  March 18, 2006 10:16am

James Altucher throws the gauntlet down in his weekend Blog round up at Real Money:

"Barry, I’m going to test this hypothesis because I don’t think it’s true. Specifically your statement: "this [lower short interest] is a longer term Bearish contrary indicator. Rallies very often get started via short covering rally — no shorts, less rally."

Dinner on me if I’m wrong (unless you abhor the thought of having dinner with me)."

James, of course I don’t abhor the thought of dinner with you — you are good and interesting company.

My only concern is  whether I will be in the mood for Italian (Hmmm, I’ve wanted to try Da Filippo or Fiamma) or Asian Cuisine (Mr. K’s is around the corner from my office) perhaps Steak (I’ve never been to Angelo and Maxie’s, and Bobby Van’s Steakhouse is in my building).

I’ll start thinking about other places that interest me . . .

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UPDATE 3:  March 22, 2006 10:16am

The WSJ reports this morning that Short Interest Increases 2.1% On the Big Board

Short sales rose on the New York Stock Exchange, breaking three months of fewer
bearish bets, despite a slight rise in the stock market.

For the monthly reporting period ended March 15, the number of
short-selling positions not yet closed out at the NYSE, including all issues,
rose 2.1% to 8,243,648,110 from mid-February.

Market-wide, the short ratio, or number of days’ average volume
represented by the outstanding short positions at the exchange, rose to 5.1,
compared with 4.5.

Category: Markets, Technical Analysis, Trading

Dennis Gartman’s Rules of Trading

Category: Investing, Markets, Rules, Trading

IBM, Telecom iShares

Category: Trading

Stopped Out

Category: Trading

Chart of the Week: Risk Appetite

Category: Investing, Psychology, Trading

Toe in the Water

Category: Trading

New Column up at Real Money (03/03/06)

Category: Trading

Why the Short Term Upside Bias?

Category: Investing, Technical Analysis, Trading

The Backward Business of Short Selling

If you haven’t already, I strongly admonish you to go read Jesse Eisinger’s column today:

It’s a Tough Job, So Why Do They Do It?  The Backward Business of Short Selling

Here’s the money quote:

Short_interest
"The shorting life is nasty and brutish. It’s a wonder anyone does
it at all.

Shorts make a bet that a stock will sink, and nobody else wants
that: Not company executives, employees, investment banks nor most investors.
That’s why most manipulation is on the other side; fewer people object when
share prices are being pumped up. For most on Wall Street, the debate is whether
shorts are anti-American or merely un-American.

Yet in all the paranoia about evil short-sellers badmouthing
companies, what is lost is how agonizingly difficult their business is. They
borrow stock and sell it, hoping to replace the borrowed shares with cheaper
ones bought later so they can pocket the price difference as profit. It’s a
chronologically backward version of the typical long trade: sell high and then
buy low."

Go forth and read . . .

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Source:
It’s a Tough Job, So Why Do They Do It?
The Backward Business of Short
Selling

Jesse Eisinger
WSJ, March 1, 2006; Page C1
http://online.wsj.com/article/SB114118313441386192.html

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UPDATE March 2, 2006 10:32am: 

See below for more text

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Category: Data Analysis, Financial Press, Trading

Get Darwinian on Your Portfolio!

Category: Economy, Investing, Markets, Technical Analysis, Trading