This page has been archived and commenting is disabled.

As Fundamentals Return With A Vengeance, Here Are The Most Hated Russell 2000 Stocks

Tyler Durden's picture




 

Something dramatic happened in the past 2 days: fundamentals came back with a thud, quite literally, for those momo traders who believe that they can always top tick a stock and sell just before it. Instead now they are caught in a toxic spiral of doubt when to take profits, hoping for a return to previous highs, even as stocks continue to descend ever lower. Of course, it is preposterous to assume that the Fed will allow a return to full normalcy: as we have written since oil passed $90, this is merely the Fed's ploy to kill the surge in commodity prices. Soon enough, WTI will get back to levels that are acceptable to the Fed, at which point the whole reflation trade will start grinding higher again one more time. In the meantime, the "normalcy return" could last one day, one month, or more. Additionally, keep in mind that the Fed will have to create an "unexpected event" ahead of June, which will be the trigger for QE2+, which leads us to believe that there will be at least two pronounced major distribution events: the current correction, and the next, and far more potent one, before the end of Q2. As such, we will once again commence looking at securities in a way that makes sense from a fundamental basis (as opposed to buy because it is green). Below, in our first foray back into normalcy after a long absence, we present the most hated stock in the world: these are the 28 names on the Fed favorite Russell 2000 which have a short interest as a percentage of float of more than 30%. They are hated with a passion, and for good reason. That said, in times when the Fed steps back from the limelight, these are the companies that should likely trade alongside a dropping market. Alternatively, due to their high beta nature, they will likely surge as soon as the Fed decides the break from executing its third mandate (and the populations of developing nations) is over.

The 28 names charted:

Granular level data on the same names:

(Source: CapIQ)

Next up, we will look at the biggest beta outlier companies.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 01/20/2011 - 13:20 | 890258 Salinger
Salinger's picture

Noon hour

Roach on China on Bloomberg Tv

mms://a627.l2479952251.c24799.g.lm.akamaistream.net/D/627/24799/v0001/reflector:52251

 

Keene to Roach: What about human rights in China?

Roach: "you need to see human rights issues outside of the personality of imprisoned Nobel Peace Prize winner Liu Xiaobao and in the context that the average Chinese family has seen income increase 10 fold, boundries of freedom of expression have increased a lot and you must remember there are boundries of civil behavior even in the US."

 

an unrelated video of torture in Chinese prisons

http://www.youtube.com/watch?v=8Q3SZAiMdmY

Thu, 01/20/2011 - 15:13 | 890653 66Sexy
66Sexy's picture

Sorry kids  .. the droids are still buying.

There's no fundamentals to see here. move along... move along..

 

BTFD

Thu, 01/20/2011 - 13:09 | 890286 unwashedmass
unwashedmass's picture

 

guess what tho -- new tactic to make segments of retail trading public sit on their hands and take the shaft -- take the platform down or claim a glitch that prevents trading....

guess who? crappiest active trader program going ....fidelity's ....its not updating anything but quotes right now.....no balances, no trading data....

so how many retail traders are stuck holding as we slide downward?

dirty trick? hard to tell as fidelity's platform to my mind is one of the most unreliable i've ever seen.

also run schwab and etrade, and they are having no problems.....

Thu, 01/20/2011 - 13:13 | 890297 IBelieveInMagic
IBelieveInMagic's picture


OT, I had sold a PUT (it appears in my Orders tab) but it has not been updated in my transaction history on Fidelity -- it has never been delayed this way in the past. The PUT price has not increased since my trade -- I am wondering if my brokerage firm is front running me to the extent of buying my PUT with hope of flipping it higher and so has kept my transaction pending and hence not updated my transaction history.

Would appreciate any thoughts on this situation from the trading community.. 

Thu, 01/20/2011 - 13:16 | 890310 SheepDog-One
SheepDog-One's picture

I'd call them right away and ask them whats going on.

Thu, 01/20/2011 - 13:22 | 890332 unwashedmass
unwashedmass's picture

 

already did that, twice. First, denied there is a problem -- usual way they operate. Second call, thirty minutes later, acknowledged it is a systemwide problem.

like i said, this is NOT a platform to rely on for any critical trading.

Thu, 01/20/2011 - 14:19 | 890513 ReeferMac
ReeferMac's picture

Think or Swim from TDA is pretty good. Let me know if you want to switch, I can get a referral bonus! LOL!

Thu, 01/20/2011 - 13:17 | 890314 unwashedmass
unwashedmass's picture

 

i don't think Fidelity is frontrunning orders, but i do think that -- given the frequency of the "problems"....particularly on "problematic" days, that there is reason to believe that they work to keep the trading volume going in the "wrong" direction subdued or shut down.

Thu, 01/20/2011 - 13:18 | 890319 unwashedmass
unwashedmass's picture

 

fortunately i run schwab and etrade active trader programs as well.....everyone involved or dependent upon Fidelity would probably be well advised to do the same as they are EXTREMELY unreliable. EXTREMELY.

Thu, 01/20/2011 - 13:15 | 890302 SheepDog-One
SheepDog-One's picture

Reality crashes the BTFD party suddenly with its muddy iron boots? We'll have to wait and see if 'fundamentals have suddenly returned with a vengeance' but one thing is for sure, everything does suddenly look very skittish!

Thu, 01/20/2011 - 13:16 | 890306 HarryWanger
HarryWanger's picture

And on cue, the dip buyers arrive in a frenzy on SPX cutting the losses in half. I still anticipate 1250 but it'll be a struggle to get there.

Thu, 01/20/2011 - 13:18 | 890318 SheepDog-One
SheepDog-One's picture

Oh shut the hell up Harry with your BS...BTW hows that Apple doin...down -$8 huh?

Thu, 01/20/2011 - 13:28 | 890346 HarryWanger
HarryWanger's picture

Looks like someone's a bit upset that they didn't get their "end of the world crash". LOL. Sorry, pal, shallow pull backs are all you get. BTW: AAPL down 7, you should have considered buying it down 8.

Thu, 01/20/2011 - 13:31 | 890359 SheepDog-One
SheepDog-One's picture

-$17 x ___# your shares = your losses since yesterday Harry! BTW who ever said I predicted the world would end today? Never said any such thing.
Bit upset and hysterical there Harry?
Well since you cant talk about your usual topic Apple, back to prattling on about the S&P Harry, you crack me right up!

Thu, 01/20/2011 - 14:00 | 890450 blindfaith
blindfaith's picture

Just imagine what the trade imbalance would look like if that great American Steve Jobs had made the Apple products in his home country instead of lining the pockets of Communist Chinese Companies, The Royal Saudi Family..and o yes his own.  His royal highness doesn't like criticism.  Thanks, I'll take Bill Gates 1000000 times over 1 Mr.Steve.

 

The next time you all bitch about China, the trade imbalance, the dieing dollar, just glance down at you Iphone, Ipad or Iwhatever and say to yourself...I had nothing to do with it.

Thu, 01/20/2011 - 14:03 | 890459 John Law Lives
John Law Lives's picture

Harry,

I have come to realize that you are one of the more enlightened participants on this forum.  I wonder how many neophytes here have missed out on the stock market revival since March of 2009.  Maybe if Tyler keeps posting doom-and-gloom articles, the Pavlovian dogs here will feel more comfortable at their pity party as they await Armageddon.

Thu, 01/20/2011 - 14:14 | 890496 SheepDog-One
SheepDog-One's picture

Well Harry and John why dont you 2 assclowns go form your OWN forum, you 2 enlightened geniuses can do far better than Tyler obviously!

Thu, 01/20/2011 - 14:30 | 890539 John Law Lives
John Law Lives's picture

At least Harry and I and Robo had enough SENSE to participate in the 5,000+ point rally in the Dow Jones since March of 2009 whilst neophytes here huddled together awaiting Armageddon.

Money talks and BS walks.  I sincerely hope you made some money in the markets over the past 21 months.  It was easy money.

Thu, 01/20/2011 - 14:40 | 890566 d00daa
d00daa's picture

stock market revival != economic revival, no matter what The Bernank thinks.

Google "bear market rally."  Really.  Give it a shot.

I've made out pretty well since March '09,  so what?  Doesn't mean I don't believe the whole damn thing will implode eventually.

Please explain how you see consistent, long-term, self-sustaining economic growth unfolding over the next several years/decades.

Thu, 01/20/2011 - 14:50 | 890589 John Law Lives
John Law Lives's picture

When did you EVER hear me say a stock market revival equates to an economic revival?  I never did because they obviously do not equate.  Son, that is Stock Market 101 stuff...

If you do not realize by now that the Fed will continue to do as it pleases, you are blind and lost without a cane.  How much more evidence do you need?  If the only future "resistance" the Fed is worried about getting is to come from Ron Paul, I would say they are not too concerned. (snicker, snicker).

Google "Bears get crushed".  Really.  Give it a shot.

Don't fight the Fed.  Those who do get crushed.  Bernanke doesn't know or care what you think.  Don't get crushed.

Thu, 01/20/2011 - 14:58 | 890608 d00daa
d00daa's picture

Wow.

You could have saved the bandwidth and simply said "this time it's different."

 

The Bernank will continue to do as it pleases, until it can't.

Good luck to you.

Thu, 01/20/2011 - 15:11 | 890657 John Law Lives
John Law Lives's picture

Have you been paying attention for the last 2 years?  Are you remotely aware of how much intervention the Fed has taken?  Do you really think the Fed is going to take its foot off the gas now?  I am not going to defend their actions, but I can see for myself they they will do pretty much as they please WITHOUT RESTRAINT.  That is what they have been doing for 2 years. Ron Paul will get bitch slapped harder than he can imagine he if ever presented a threat to them.  Ask Ron Paul what he would replace the Fed with if it were abolished.  He doesn't know how to manage monetary policy any better than they do.  That bumpkin will get crushed if he gets out of line with them and their defenders.

Good luck to you as well.

Thu, 01/20/2011 - 17:25 | 891318 faustian bargain
faustian bargain's picture

You can believe for yourself that they'll do pretty much as they please.

They'll keep doing it until they can't. I don't know when that will be, and neither do you. In the meantime, happy gambling. Hope you get out before the casino burns down.

Thu, 01/20/2011 - 14:10 | 890480 Joe Grannville
Joe Grannville's picture

Harry's Apple is doing about as well as your PM's.  Buy more Keisers!

Thu, 01/20/2011 - 14:00 | 890449 onlymyopinion
onlymyopinion's picture

Increased longs to 80% today.  And if by chance Sir Harry is right and that we see 1250, I'll go all-in and start leverin' up with some margin.  Lot's of air here between 1280 & 1400+.

Thu, 01/20/2011 - 14:16 | 890504 SheepDog-One
SheepDog-One's picture

'Sir Harry' LOL wow how many ID's do you have here Harry! 5 or more??

Thu, 01/20/2011 - 15:27 | 890704 onlymyopinion
onlymyopinion's picture

After watching the buyers storm in today, it's becoming more likely we may never see 1250 again.  Glad to have added some discounted shares this morning.

Thu, 01/20/2011 - 15:50 | 890796 HarryWanger
HarryWanger's picture

I still think we'll see 1250 pretty soon.

Thu, 01/20/2011 - 16:41 | 891058 onlymyopinion
onlymyopinion's picture

Not saying it won't happen but I think the odds are getting slimmer by the day, JMVHO.  If it does, my accounts 20% cash plus the power of margin is awaiting an opportunity like that.  If I can get the rest in at 1250 it will be time to sit back and let it ride for the balance of 2011 and wait for 1400+. 

Thu, 01/20/2011 - 13:19 | 890320 RobotTrader
RobotTrader's picture

Looks like Uncle Gorilla is taking care of business.

Smashing the CRB Index in order to quell the global food riots.

As usual, paper can be used to drive any commodity, up or down, just by pushing a few buttons at the COMEX and NYMEX consoles at 33 Liberty.

Infinite Fiat rules.

Thu, 01/20/2011 - 13:22 | 890333 SheepDog-One
SheepDog-One's picture

Yea tell that to the people in Tunisia hanging politicians today! Tell them of your magical Bernanke stories Im sure theyll be impressed.

Thu, 01/20/2011 - 13:20 | 890326 buzzsaw99
buzzsaw99's picture

Great system. Two of those companies have over 100% of the float sold short. Everywhere I look I see fraud.

Thu, 01/20/2011 - 13:33 | 890361 goldmiddelfinger
goldmiddelfinger's picture

IWM ETF short interest is over 100%

Wonder what's the short interest in GLD?

Thu, 01/20/2011 - 13:42 | 890382 unwashedmass
unwashedmass's picture

GLD and SLV are the most amazing things on the market. questionable whether they have any gold or silver, and then, there's the  "management" by JPM, the biggest short in the world in the metals. anyone buying those two and expecting fair, free and transparent movement is deranged.

Thu, 01/20/2011 - 13:41 | 890380 Dick Darlington
Dick Darlington's picture

Now that food and oil have skyrocketed and even the lame street media are starting to catch up on what's happening in many developing country, are Joe and Jane also waking up to the reality and getting their butts off the couch?

 

http://www.bloomberg.com/news/2011-01-20/-american-idol-audience-falls-1...

Thu, 01/20/2011 - 13:51 | 890416 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

Just in time for Options Expiry tomorrow...Will Bernanke suddenly change Stock Market trend later today or tomorrow?

 

http://goodthoughtsgoodwordsgooddeeds.blogspot.com/2011/01/swiss-yodelling.html

Thu, 01/20/2011 - 13:56 | 890438 Racer
Racer's picture

Fundamentals re-assert, until the HFT bankster bullies assert themselves again

Thu, 01/20/2011 - 14:03 | 890462 sheep92
sheep92's picture

Sounds like everyone is buying the dip.

Im still short r2000.

No one cares that the bonds are getting crushed.

Again.

 

Thu, 01/20/2011 - 14:11 | 890482 John Law Lives
John Law Lives's picture

Stocks are really getting creamed today... (snicker).

Keep pumping out the doom and gloom to the neophytes.  Pavlovian dogs love cold pablum served up by fearmongering cynics...

Thu, 01/20/2011 - 14:15 | 890501 SheepDog-One
SheepDog-One's picture

Yea sure, Harry's other ID.

Thu, 01/20/2011 - 14:24 | 890526 kornholio
kornholio's picture

that is not harry, he would have no idea who pavlov is, probably some freshman community college student in psychology 100

Thu, 01/20/2011 - 14:33 | 890544 John Law Lives
John Law Lives's picture

Harry and Robo and I are peas in a pod.  We also made a lot of money by BUYING THE F'ING DIP in March of 2009.  Hope you didn't miss out.  It has been a hell of a party.

Thu, 01/20/2011 - 14:55 | 890603 SamuelMaverick
SamuelMaverick's picture

John  Law , Harry, and Robo have done well in the phony Fed pumped ramp up since 2009. So what.  Gold and silver have kicked ass in the same time frame.  The big question is , do these guys have their exit strategy in place, and can they read the minds of the FED and the TBTF when they decide to pull the plug.  Reading their posts help keep me grounded and reminds me what it is like to read Yahoo Finance and Marketwatch.  Yours, Maverick

Thu, 01/20/2011 - 15:00 | 890614 sheep92
sheep92's picture

So what do you own now and when and why would you sell?

 

Thu, 01/20/2011 - 15:07 | 890641 d00daa
d00daa's picture

They have owned and held since 666, of course.  They will never sell, because The Bernank will continue to shit skittles and unicorns until the end of time.

Thu, 01/20/2011 - 17:23 | 891304 John Law Lives
John Law Lives's picture

Nobody can time the market (unless they make the market).  That being said, I wouldn't go against the grain when the Bernake Put is in place.  It just isn't smart.

Best of luck.  I hope you make money.

Thu, 01/20/2011 - 17:22 | 891299 John Law Lives
John Law Lives's picture

I don't give out stock picks.  It is best if you do your own DD.

 Best of luck.  I hope you make money.

Thu, 01/20/2011 - 14:24 | 890525 cramers_tears
cramers_tears's picture

WHERE'S THE BERNANK!  WE NEED THE BERNANK!  DJIA TO 20K, ALICE!

It was reported that someone saw THE BERNANK headed into the Eagle L.A. in Silverlake.

Thu, 01/20/2011 - 14:35 | 890553 Grand Supercycle
Grand Supercycle's picture

Previous S&P500 / DOW / FTSE / DAX bearish warnings are confirmed today. This correction is very overdue which is not good ...

http://stockmarket618.wordpress.com

Thu, 01/20/2011 - 15:03 | 890625 gigeze787
gigeze787's picture

Tyler, et.al. --

Has anyone connected the "unexpected" stock market decline to the visit of China's communist dictator emperor to the pauper vassal nation once known as the USA?

Could Bernanke-Geitner be throwing the Chinese a bone on commodity inflation in order to 'facilitate' discussion on the yuan-USD exchange rate?

Thu, 01/20/2011 - 15:49 | 890787 deepsouthdoug
deepsouthdoug's picture

I'd add a sell off around the time of the national debt extension.   That could be the biggest sell off in the first half of the year. 

Fri, 01/21/2011 - 06:21 | 891798 Ferg .
Ferg .'s picture

Look at the timing of the dip buying on the S&P , towards the end of the day when volume is at its lowest . Pretty typical of the entire rally since August really . When have most of the gains been achieved ? Intraday towards the end of the session and on the daily around holidays on thin liquidity . Thanksgiving , Christmas , New Year's . Of course bears should be aware of this by now . It's not going to stop until sneeky dip buy attempts are fought and battered forcefully down .

Do NOT follow this link or you will be banned from the site!