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Short Interest

Tyler Durden's picture

NYSE Short Interest Declines Modestly By Mid-October As Stock Rally Fizzles





After sustaining nearly two months of an endless ramp in stocks, driven exclusively by Bernanke's Woods Hole speech indicating that a new liquidity tsunami is coming, short interest at the NYSE has finally come in marginally. As of October 15, total NYSE Group short interest declined by 2%, from 14.3 billion to 14.0 billion shares shorted. Of course, this has coincided with the tapering of the rally, and as incremental indiscriminate squeezing power has been eliminated, so the market appears to have topped. That said, there is an over 1 billion shares delta to get back to LTM lows attained in late 2009, implying that there is likely not much incremental short capacity here, and that any more lower will have to be driven by actual selling of existing positions. Alternatively, another mindless move higher on nothing but liquidity expectations, could force an additional squeeze out of the near record number of shorts.

 
Tyler Durden's picture

Shorts Refuse To Capitulate: End Of September NYSE Short Interest Near Record Highs





The one side-effect of the torrid market move over the past 40 days that every bull had been hoping for, a massive, and self-sustaining short covering spree, has completely failed to materialize. Despite what is now a 10%+ move since early September, predicated by nothing more than the dollar debasement and QE2 expectations, NYSE short interest remained virtually unchanged for the past 30 days, starting the month at 14.36 billion shares and ending the month at14.35 billion! In other words, the shorts' conviction that the rally is based on nothing fundamental is as strong now as it was when they were 10% more in the money. And that they are willing to experience such pain reinforces their expectation, right or not, that the market is way overbought and is due for a major pullback.

 
Tyler Durden's picture

Lack Of Capitulation By Shorts, As NYSE Short Interest Remains Near Record, Explains Parabolic September "Flush" Ramp





A week ago, when we pointed out that the NYSE short interest had surged to nearly its highest levels in over a year at 14.4 billion shares, we speculated that as the market surge appeared to be moderating, that the 600+ million in new incremental shorts had covered. This, of course, happened before the most recent parabolic ramp in stocks (which was spun by CNBC as "validated" by Tepper's "buy stocks no matter what" comments). Friday's NYSE SI update now explains the seemingly ceaseless surge in stocks despite constantly deteriorating economic news. The reason: the gross short interest between August 31 and September 15 was completely unchanged! It appears that just as retail investors refuse to allocate capital to stocks regardless of how artificially high the market goes, so shorts completely ignored the ramp in the market from ~ 1050 On August 30 to around 1125 on September 15: short remained dead even at 14.4 billion. So what happens? State Street/BoNY gets the daily short report, passes it on the the repo desks, and tells them to pull the borrow in the most shorted stocks, as apparently the message to the shorts just isn't getting through. And what better way to force a short ramp than to keep shorts massively squeezed. But because the stubborn shorts don't buy the ramp in stocks, they keep putting on new replacement shorts, which has led the market to keep recycling the weakest hands, endless retail outflows be damned. Which means that the squeeze could easily continue for so long as the State Streets of the world believe that the shorts will finally capitulate, and make the rally self-sustaining. So far it is not working.

 
Tyler Durden's picture

NYSE Short Interest Surges To Second Highest In A Year In Advance Of September Short-Covering Rally





Still wondering what caused the nearly 10% spike in the market? It sure as hell wasn't flows into funds and/or ETFs: both were negative for August, and we know that at least mutual funds have seen outflows for all of September. The reason is far simpler and it is no different from what caused the blind rally back in March 2009 when State Street commenced forced stock buy-ins after it gave an order to repo desks to recall all financial shorts: the NYSE short interest as of August 31 was 14.4 billion shares. This was the second highest gross short interest on the NYSE in over a year, and the highest since mid-June, when the market dropped from over 1,100 to the year lows just over 1,000. This time however, shorts were caught flat footed, as the spike in shorts by over 600 million NYSE shares, has seen a straight line market ramp beginning on August 31, and forcing blind covering without regard for what offers are lifted: a perfect environment for those who wish to set price on the offer side to execute their plan. At this point the short covering rally appears to have fizzled - we will update you on the mid-September SI data when it is released in a few days time.

 
Tyler Durden's picture

NYSE Short Interest Lowest Since January As Selloff Buffer Disappears





Here is another reason why the market may soon undergo Flash Crash 2.0 on purely structural reasons that have nothing to do with the deranged computerization of capital markets - the one natural decelerator to any market collapse, short interest, was just reported by the NYSE to have hit a 7 month low, at 13.7 billion shares. This metric hit a 2010 high of 14.5 billion in the days following the flash crash, when the natural response by investors was to follow through on waht was expected to be a major market swoon. Yet the odd July move higher on no volume which was a direct replica of last year's action cut off this move into shorts early on, and the result now is that the short interest buffer is now gone. Absent the mystery bidder appearing, there will be few "profitable" buyers remaining to prop the imminent market crash.

 
Tyler Durden's picture

NYSE Short Interest Drops By 200 Million Shares, Still Near 2010 Highs





Looking at the short interest in the NYSE one would think that the market is a mirror image of where it has been. Interestingly, even though for the week ended March 31, the NYSE recorded a drop in short interest by 224 million shares, the total number of 13.9 billion shares short is near 2010 highs. Beginning at a low of 13 billion shares on January 1, short interest has risen steadily hitting the YTD high of 14.1 billion on March 15. It appears that the shorters, at least as indicated by this data series still continue to disbelieve the no volume melt up. We will observe the next update in two weeks to see if the April 15th data point indicates capitulation by the shorts, or if shorts have layered into bearish bets. To be sure, compared to prior year short positions, which hit a high of 15.6 billion just before the second half 2009 rally began, we are at materially lower short levels.

 
Tyler Durden's picture

NYSE Short Interest Stays Flat At 13.2 Billion Shares, Down 12% Over Prior Year





The most recent short interest report from the NYSE indicated that bearish bets in the form of short exposure is near 2009 lows. The number of shares shorted on November 30, 2009 was 13.2 billion, a 0.2% increase from two weeks prior and a 12% decline from the prior year's 14.8 billion. Of the 4,124 stocks available for trading, 3,431 had short positions of at least 5,000. The most recent short interest came out at 3.45% of total shares outstanding, also flat from the prior two weeks.

 
Tyler Durden's picture

NYSE Short Interest Rises 2.8% In First Half Of October





In the first half of October, NYSE short interest as reported staged a moderate comeback, rising by 2.8% sequentially to 13.4 billion shares on October 15th, from 13.1 billion at the end of August, and a 1.1% decline from the 13.6 billion shares short on October 15, 2008. The short interest represented 3.51% of total shares outstanding.

 
Tyler Durden's picture

NYSE Short Interest Drops 3.5%, 42.5% Below Peak





On October 9, the NYSE provided its latest Short Interest update. The total number of shorted shares on the New York Stock Exchange at September 30 was 13.06 billion, a 3.5% decline from the 13.52 billion on September 15, a 42.5% decline from the all time high short position of 18.61 billion on July 15, 2008, and a 23.8% decline from the 2009 high of 16.17 billion in mid-March. The latest short interest represented a mere 3.42% of the total share outstanding as more and more bearish bets are closed, either voluntarily or forecefully. The current SI is equal to the short interest at the end of 2007.

 
Tyler Durden's picture

Pick Up In SPY Short Interest





Data Explorers, via Alphaville, is demonstrating a rapid pick up in SPY shares on loan, a proxy for Short Interest. Of course, with periodic short recalls such as the one in IYR by UBS, it is only a matter of time before the banks create an artificial end to any such comparable bearish momentum trend in any of the highly trafficked ETFs. Stay tuned as we find out where the first SPY recall of the day will occur.

 
Tyler Durden's picture

Market Rips, Short Interest Plunges





This is so much more than just a short covering rally. Oh wait, it's not.

 
Tyler Durden's picture

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.

 
Tyler Durden's picture

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.

 
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