The "World's Biggest Short Squeeze" Has Spread From ETFs To Stocks

Tyler Durden's picture

Earlier this month we reported that the move higher from the February lows was not only the result of the biggest squeeze ever - something that had been known before - but that something surprising had emerged: according to JPM's Prime Broker desk, it was only ETF covering that was driving the squeeze as recently as of the end of March.


To follow up on this, a massive short squeeze continues to prop up the market with yet another move higher throughout April.


Courtesy of the latest report by JPM's Prime Brokerage, we now know two reasons why there was such a large move in April. Hedge funds accelerated the pace of ETF covering, only this time single stock names have also joined the party. In other words, ETF covering is removing hedges, and single stock covering is getting HF's into a net long position.


JPM also notes that HF net long exposure is now above the 12 month average, and although the "smart money" is typically in the know on such things, it remains to be seen just what the catalyst will be that pushes markets higher, especially in the face of a dismal earnings season, especially when considering that the very same smart money is, according to Bank of America, selling stocks for a record 13 consecutive weeks..

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ThisUsernameFollowsTheRules's picture

When things do fall apart, and people are losing millions, billions, I hope it's not like all the other times. Remember during the financial crisis or the dot com crash, and everyone got the blood lust and went out killing? We lost so many good people.

N0TaREALmerican's picture

Dude, that was a video game, and the drugs!   

Boris Alatovkrap's picture

This time is different. Repeat until eye is glaze over and is convince. Repeat if necessary.

The Saint's picture
The Saint (not verified) Boris Alatovkrap Apr 27, 2016 1:13 PM

Just one question: WHEN?


Al Huxley's picture

Yeah, but at least those responsible for the situation were all held accountable.  I still have fond memories of all those fraudulent ponzi artists being sent off to prison for the rest of their days.  Good times...

Boris Alatovkrap's picture

… and then you are wake up.

slaughterer's picture

With no shorts in the market, only dip buyers cushion a sustained plunge.  

Boris Alatovkrap's picture

Speaking of plunge, Boris is find fat nephew's shorts on floor… now in market for new floor covering.

KnuckleDragger-X's picture

Kill'em all and let the algo's sort'em out.......

N0TaREALmerican's picture
N0TaREALmerican (not verified) buzzsaw99 Apr 27, 2016 11:49 AM

Eventually, the Fed will have all their money.    Could take a few decades tho...

Consuelo's picture



Out House meeting with the Fed a few days back...?

N0TaREALmerican's picture
N0TaREALmerican (not verified) Consuelo Apr 27, 2016 11:52 AM

What did they say?

Theonewhoknows's picture
Theonewhoknows (not verified) Apr 27, 2016 11:52 AM

Politics, economics and media - they all in the gutter. We have to ask ourselves a question what we can do about it HERE AND NOW. We all know that the ship is going down but the music keeps playing but what we should be thinking about is how not to be swept by the wave of bad consequences developed world indebtedness, bubbles in many corners of market and war on cash. Playing a bear against central banks may be very hard, on the other hand, prolonging this bingeing on QE-driven bubbles equals meeting a wall sooner or later. Especially that smart money is already evacuating

N0TaREALmerican's picture
N0TaREALmerican (not verified) Theonewhoknows Apr 27, 2016 11:53 AM

Two words:    REEE BAR!!!

Al Huxley's picture

 it remains to be seen just what the catalyst will be that pushes markets higher

No it doesn't!  Jeeze, don't you guys read your own articles?  Central bank buying will push the markets higher.  Wow, the inability to see the obvious is astounding...

slaughterer's picture

OT: but WTI has recovered all of its losses already.  

Al Huxley's picture

But it's not too late to buy the AAPL dip.

Stox's picture

The best route to success is to figure out where are the crowded trades, and then either steer clear of them or fade them.

Emergency Ward's picture

Smart Money vs Smart Money.  Like MAD Magazine Spy vs Spy.