If you enjoy the content at iBankCoin, please follow us on TwitterShort interest in S&P 500 companies jumped by almost 50 percent from July to September as U.S. stock markets entered their first correction in four years. Those positions have grown amid a volatile stock market that’s sent a gauge of companies with the most bearish wagers down almost 30 percent in five months, data compiled by Bloomberg and Goldman Sachs Group Inc. show.
The Goldman index tracking the most-shorted stocks in the Russell 3000 Index is down 7.4 percent in the first four trading sessions of 2016 to the lowest since 2009. At more than 3 percent, short interest in the S&P 500 is the highest since October 2011, when the benchmark index was recovering from a 19 percent decline.
“People on the short side are happy today,” said John Manley, who helps oversee about $233 billion as chief equity strategist for Wells Fargo Funds Management in New York. “There’s a very keen and vivid memory of what happened during the last market meltdown. People are anticipating that the same thing might happen again.”
Elevated short interest suggests a handful of investors could be poised to reap gains from the S&P 500’s weak start to the year. The level of short positioning in September had the potential to translate into $90 billion of stock-buying to return to average short levels, analysts at JP Morgan & Co. said said at the time.
Joined Aug 2, 2009
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Would think that this morning’s fade brought about peak bearishness/ bull frustration.
Cont’d from previous post.
My last fill for TNA of 49.60 has not been met. At this point we have about a 2.5 % move from the payroll number. My last fill assumes a 3% drop and will be pulled after 2pm. I believe my second fill just turned positive from the low of 50.50.
Anybody take a shot at oil today?
I am still neutral. …
My second TNA fill was 51.31.
The put to call ratio was the highest in 5 years or so around December 28th. $CPCE. When to many lean one way the market tends to punish them. Big short covering rally coming soon. Puts to expire worthless
You and everyone else is thinking that. Just go on the the Yahoo boards. ANyone expecting that “short covering rally” anytime soon will be sorely disappointed. JMHO
…anyone going on the Yahoo boards will be sorely disappointed!
-and I do hold puts – #MFC -tsx
-but #XLU calls are not disappointing me.
Is anyone really surprised the bounce attempt could not hold and was shorted? The clue was in pre-market right after the jobs report numbers came out…spike higher immediately after to have SPX up over 1% then a fade heading in to the open. That told me the bounce would not last after markets opened. Maybe I just got lucky! Downside targets for SPX and QQQ will get hit and if short this market, just have a bit more patience. Knife catching at this juncture does not have good odds at being a winning trade. The trend is down and there has been much technical damage done. Look at what happened in the China markets. Were up over 3% at one point as the Gov’t intervened, but lost 2/3rds of that pop by the close. WEAK WEAK WEAK. Stay the course, the trend is down.
And who can blame them, shorting is easy. The list of stocks down 20+% for the year already is ridiculous.
I’m thinking a dip Monday gets bought with both fists… we’ll see.