Did The Shorts Capitulate?
We noted yesterday that the 'gains' that shorts had temporarily enjoyed from the start of April were rapidly squeezed out since the gap-open lows on NFP Friday. However, yesterday's massive outperformance of the Russell 3000's 'most-shorted' names relative to the index itself suggest more than a few weak hands threw in the towel. Desk chatter this morning was that this was the largest cover day since June. Of course, this morning's ramp suggests there are more stops and shorts to be chewed through yet...
Intriguingly the short cover stopped (or slowed) as the FOMC Minutes were pre-released... (around 2pmET)