A piece in today’s Journal regarding Short Interest
Short-selling activity jumped at the Nasdaq Stock Market in the first half of the month as investors feverishly unloaded technology shares.
For the semimonthly period ending Feb. 15, the number of short-selling positions not yet closed out at the Nasdaq — so-called short interest — leapt 4.9% to 9,049,271,361 shares from 8,625,902,812 shares in late January.
Marketwide, the short ratio, or number of days’ average volume represented by the outstanding short positions at the exchange, rose to 3.9 from 3.1 in late January.
Hard to believe short interest has been increasing. Partly explains some of the retracement, as the data are backward looking. Given the fact tech companies, especially larger multinationals like HPQ and IBM have been affirming quarterly results and raising forecasts, it is tough to argue short here.
Be advised that 1) 2 companies do not make an index 2) we will need to retest the lows 3) we are at major resistance waiting it out is prudent. Shorting can prove to be a very risky scenario, as the consolidation can also prove to be a powder keg to the upside, especially if more companies affirm results.
The COMP will get really interesting on the long side once we retest or even break the lows, as I still maintain my “technology to the rescue from inflation” argument.
Source:
http://online.wsj.com/article/SB120417069553999183.html?mod=mkts_main_news_hs_h
