This page has been archived and commenting is disabled.

NYSE Short Interest Soars To Highest Since July 2009; Is An Epic Squeeze Forming In Bank Of America Shares?

Tyler Durden's picture


While two weeks ago the notable feature in the NYSE short interest update was that it had grown by a whopping 1 billion shares, or the most in over two years, this week's highlighted feature is that in the second half of August evil "speculators" did not relent in their negative bias, and brought the total NYSE Group short interest to a two year high or 14.9 billion shares, a 484 million share increase from the prior week, and the highest since July 2009 when the market still was unaware that central planning was the name of the game, and being short actually meant taking on the Chief Printing Officer head on (and fewer still realized that being long gold was the only effective way to "fight the Fed"). And just like last week when we speculated that we can "expect some even more furious short covering sprees to send the S&P much higher on an intraday basis" courtesy of this massive short interest overhang (which will without doubt be used by stock custodians to create a rally if and when needed, just like back in March of 2009, by making recalling shorts in every name), the probability of a massive "face off" rally grows as more and more join the ranks of those believing that the US capital market still plays by the rules. Newsflash: it does not. And anyone trading stocks, on either the long or short side, is guaranteed to lose.

And as an added bonus, we have added the short interest in Bank Of America. Doomed company and stock? Absolutely. But is it overdue for another massive ripfest before it's lights out. Guaranteed!


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 09/13/2011 - 17:00 | 1665226 GeneMarchbanks
GeneMarchbanks's picture

Dear Hedge Funds: Please short BofA until zero.

For the first ever I hope that Tyler is wrong here on BofA. Drop'em Now not later or next time NOW!

Let's get this over with...

Tue, 09/13/2011 - 17:13 | 1665278 SheepDog-One
SheepDog-One's picture

Everyone tells me 'there will be another rally before a fall'...well hell how many times? Doesnt the last rally to DUH 12,800 count as 'the rally before the fall'? 

The problem is all these nutsacks keep piling in short with whose money I have no idea, setting up to get creamed by short squeezes. I wish I could reach these fund managers and squeeze their necks until their eyeballs shoot out!

Tue, 09/13/2011 - 17:18 | 1665295 bankrupt JPM bu...
bankrupt JPM buy silver's picture

" And anyone trading stocks, on either the long or short side, is guaranteed to lose."


Stack the metal.  Put it away for THE rainy day.  Enough of these games already.

Tue, 09/13/2011 - 18:18 | 1665479 DeeDeeTwo
DeeDeeTwo's picture

Wriitng a blog = "I can't make money trading". Buying gold = "I can't make money trading". Krasting is Exhibit A. The dude made the big bucks trading on Inside Information with banks, Milken, etc... you know, the people RESPONSIBLE for the mess we have. Now his connections are so crappy... that he is grinding a blog worth low 5 figures.

Tue, 09/13/2011 - 20:08 | 1665649 IQ 145
IQ 145's picture

Bruce has gone down in my personal hall of fame; the day the Swiss Franc popped up over 1.40; vertically, at the top of an exponential rise, which we knew was caused by the European Public panicing into the Swissie as a "safe haven; Bruce concluded; "i'm holding on to my Swissies"; I immediately posted Sell, Sell, Sell. Short the CHF/USD. A completely obvious trade that could pay off in 5 figures in ten days. Yesterday, he published a piece that concluded; " I don't know anything about foreign currencies"; I didn't bother agreeing with him; I just laughed and went on to the next thing. Of course, you're right.

Wed, 09/14/2011 - 00:12 | 1666396 Abitdodgie
Abitdodgie's picture

Hay sheepdog i am feeling hostilaty in your comment 

Tue, 09/13/2011 - 17:27 | 1665341 max2205
max2205's picture

Everyone I know is flat via hedges. Short hedges. This could be a non indicator

Tue, 09/13/2011 - 17:46 | 1665394 ZippyDooDah
ZippyDooDah's picture

You REALLY want to bet against Tyler's record?  Really?

Tue, 09/13/2011 - 19:10 | 1665584 max2205
max2205's picture

Where'd our old Tyler go ??

Tue, 09/13/2011 - 19:29 | 1665606 disabledvet
disabledvet's picture

"Guaranteed! Guaranteed " yeah i'll give you a guarantee--short this and you're dead.

Tue, 09/13/2011 - 20:46 | 1665700 IQ 145
IQ 145's picture

The article asks is an unbalanced short interest position in BAC going to result in a rally. the answer is yes. The stock price will trade higher from here for a couple of months probably. Too Big To Fail means exactly what it says. I posted on this blog the exact day to short the DJIA at 12,700; you don't short bottoms or rallies off of bottoms; you short highs that are failing. Unless, of course, you're a civilian and intent on providing chum for people who know what they're doing.

Tue, 09/13/2011 - 17:00 | 1665238 LongSoupLine
LongSoupLine's picture

one order of engineered corruption, coming right up.

Tue, 09/13/2011 - 19:32 | 1665614 disabledvet
disabledvet's picture

That's "Guaranteed corruption" to you.

Tue, 09/13/2011 - 17:01 | 1665241 Traianus Augustus
Traianus Augustus's picture

"anyone trading stocks, on either the long or short side, is guaranteed to lose."


Put this on the tombstone of all capital markets not just stocks!


Tue, 09/13/2011 - 17:01 | 1665242 zorba THE GREEK
zorba THE GREEK's picture

It looks like many investors are betting Greek default is not priced in.

Tue, 09/13/2011 - 17:04 | 1665248 Traianus Augustus
Traianus Augustus's picture

Greece 5yr CDS close price today only 7,234.00 up 52.87% from yesterday!!!  US Equity market rally on ?????

Tue, 09/13/2011 - 18:49 | 1665496 Cdad
Cdad's picture

It looks like many investors are betting Greek default is not priced in.

Correct.  And that short interest chart looks quite bearish for the S& I am a tad confused right now with the hyperbole about it indicating a massive short squeeze is about to happen.

Just when folks think that all shorts would have squeezed out last month...nope.  They are pressing.  

So...someone let me know what I am missing here.

***And furthermore...what is this business about "priced in" about anyway?  Seriously, what equity out there, especially after that last 24 hours is priced to anything?  Nothing is priced in to this market because fundamentals do not matter, and even the supply and demand of shares do not matter, as does thinking, or honestly assessing Europe or ANYTHING.

This market has been broken for three years.  Price means nothing more than the algo that is buying or selling a particular on any given day...or even any given hour.

So you tell could we price in this situation in Europe...or in a rear view could it be priced in?

Cdad opens the floor to ZH members, including criminal syndicate Wall Street HFT guys, to answer the question of  "priced in" ***

Tue, 09/13/2011 - 19:09 | 1665578 SheepDog-One
SheepDog-One's picture

I hope thats the case Cdad, this time too much pressure to perform a short squeeze again.

'Is total economic collapse priced in'...when the ICBM's fall on NYC some morning soon the DOW will probably rise +200. 

Tue, 09/13/2011 - 19:13 | 1665590 max2205
max2205's picture

Try 21 years

Tue, 09/13/2011 - 20:13 | 1665660 Stax Edwards
Stax Edwards's picture

With the exception of 2008 look at what happened to SPY once everybody and their dog thought shorting equities was the sure bet. The fact is the Euro problem is appropriately reflected in the European indicies.  The exposure here and the reaction to each days events in US markets is often overdone, particularly in equities with minimal exposure to the Euro.  I think algos have a lot to do with that with the record correlations.  The postitive for our markets is the problem is over there, and you would have to be very naive to think money managers on this side of the pond aren't hedged against that.  I mean for gods sakes it is playing out in slow motion, plenty of time to get hedged appropriately to your exposure.  When and if Greece gets the boot (I hope soon), mayhem shall ensue for a bit and I for one will be picking up bargains.  Doesn't mean I am right, but the reach for safety is awfully crowded.  This from a guy who went ultra cashy in May/June in anticipation of a huge crash.  I watch dollar strength like a hawk though.

You know what they say, whenever everyone moves to one side of the boat....

Tue, 09/13/2011 - 21:16 | 1665812 Cdad
Cdad's picture

With the exception of 2008 look at what happened to SPY 

Exactly.  Look at the vey front end of that chart again.  Based on this chart...we are there once the present.  Now, follow the chart out to 2009.  That is when everyone hit the same side of the boat.  I think that is the direction we are going.  I believe shorts will start getting very aggressive here.  Why wouldn't they?  The have a guaranteed sovereign default directly ahead.   The SPY did not reverse and head higher until this short interest was much higher...and steady month to month.  Look where the SPY is in relation to that rising short interest.  In a relative sense, it looks too high to me.  Again...this if we are trying to interpret these two statistics juxtaposed.  

As for the safety trade...I hardly think of being short as safety.  Currently, long gold and T bills are the crowded safety trades, wouldn't you agree?

As for the rising short interest and the pending Greek default...that default could happen in a couple months...or tomorrow morning.  Right now you have a growing list of folks throwing in the towel on the whole issue.  You have Greece preparing for the return of its currency.  And the US equity market is rising...on nothing...lies...repeated rumors of solutions...banker statements...and on light algo volume.

So I guess my point can run for the hills on your short positions if you like, but again...why exactly would you be doing that?  What on this chart would indicate that you should cover?  

Let me know...'cause I don't see it.  I admit, this is one ZH post that I simply do not understand in the slightest.  And if your answer is Operation Twist on the 21st...that is the ONE SINGLE THING that clearly looks "priced in" based on action in the 30 year bond...something that should become even more clear after the auction tomorrow.

Tue, 09/13/2011 - 23:34 | 1666287 DeadFred
DeadFred's picture

The lies have been thick on both sides. Greece is going to default over the weekend, Moody's is going to downgrade France. Everyone jumps in short and then it doesn't happen. Good time for a short squeeze and it will continue that way until Greece does default and France does get downgraded and so on. Why are these guys getting squeezed? Because they're levered to the hilt stupidly once again. The effects of the Greece default are not priced in, how could they be? We have only the vaguest clues of what will happen when the stuff hits the fan, will liquidity freeze up and if so how much? Everything I've read on the freeze assumes it will be like 2008. Why? We may have learned enough to avert disaster or we could be fooled because 2008 was only the Coors lite of liquidity freezes and this will be the Jack Daniels version. I'm betting it will be a good stout port at least. Sovereign defaults, state defaults, bankruptcies, crashing tax receipts, it's a huge list of things that MAY happen. We don't know how this will unfold so it can't be priced in, period.

Tue, 09/13/2011 - 17:02 | 1665245 Belarus
Belarus's picture

Yup, going long or short is dangerous. The market never tanks when everyone is expecting it. We'll have to endure more pain to the upside before that happens.

So just Google "save." Anytime there is a new article....go very long, until you don't.

Tue, 09/13/2011 - 18:12 | 1665465 jdelano
jdelano's picture

I've had a lot of success in this yo-yo market holding near the money puts--the trick is just to keep your balls and double down if you take a 25% hit. Eventually your gonna get a big down day and when that happens they FLY. Every time I make 20% I cash out and wait for a solid up day to put em back on. Been a minting machine so far--playing with all house money. Now to make the really big bucks I think I'll make a DVD and an infomercial.

Tue, 09/13/2011 - 21:23 | 1665819 Manthong
Manthong's picture

Yeah, same experience.. it's scaring the crap out of me but it has been working.. just gotta' be careful not to go overboard.

 Oh, and to whoever junked you.. I have five figures in the last 30 days that shows it works.

Tue, 09/13/2011 - 23:38 | 1666301 DeadFred
DeadFred's picture

Maybe then you can post on the top bar of Zerohedge. Oops, did I say that out loud?

Wed, 09/14/2011 - 16:48 | 1668125 Manthong
Manthong's picture

P450 -480 puts PCLN, in and out again and again.. P140 to 170-AMZN, CMG P250-270, P315 AAPL.. C180-230 GLD over and over.

There you have it..  It seems you just have to be able to tolerate daily four figure swings, double up if you go down far enough and be a little prescient or lucky with timing, trend and circumstance.

I'm not qualified to teach anybody anything. I just know what seems to work for me and I'm willing to put digital fiat on the table and take it off.

Nothing there that rates top line on this blog.

I just hang here to see if everything is fixed yet and the macro has changed.

Tue, 09/13/2011 - 17:04 | 1665246 SwingForce
SwingForce's picture

Remember back in 2009 when BAC issued billions of new shares? They allocated in million-share lots to (guess who?) The Shorts. 

Tue, 09/13/2011 - 17:17 | 1665247 SheepDog-One
SheepDog-One's picture

WHY do these idiots keep piling in short?? WTF are they more gulliable than Charlie Brown on a Lucy-held football? 


And you moron shorts are the ONLY reason the FED is still in business WTF KNOCK IT OFF you damn nutsacks!


Tue, 09/13/2011 - 17:28 | 1665344 mynhair
mynhair's picture

My sentiments exactly, SD1!  Who are these moron shorts that can't stand the heat, but insist on cooking?

Guess Leverage is not just a TV show.  Bunch o'fools.

Tue, 09/13/2011 - 17:57 | 1665428 ZippyDooDah
ZippyDooDah's picture

This fucking nutsack keeps looking to short this overhyped shitsack system because it would be just so delicious to make money off the "inevitable" failure of said system.  Just desserts, and all that.  So yeah, call me a sucka, sucka.

Tue, 09/13/2011 - 17:59 | 1665439 trendtrader377
trendtrader377's picture

You'll have to forgive my ignorance but can you explain how the shorts are keeping the FED in business?

Tue, 09/13/2011 - 19:10 | 1665585 SheepDog-One
SheepDog-One's picture

FREE fue for them to short squeeze and ramp markets on it!

Tue, 09/13/2011 - 20:44 | 1665698 Variance Doc
Variance Doc's picture

Hey SD1, I'm short.  You want to call me an idiot?  Just try.


There are many factors at play here and blindly going short is not a play; use some non-traditional mathematics/statistics and there is money to be made, but be careful.


To blanket people with the concept of stupidity for shorting indices/stocks is like living in a glass house.  Careful motherfucker.




Tue, 09/13/2011 - 17:05 | 1665250 kito
kito's picture

tyler, sorry to digress, but is krugman really saying he is bullish on gold? due to deflationary pressures?

Tue, 09/13/2011 - 17:10 | 1665270 malikai
malikai's picture

My usual response has been that I have no idea what drives the price of gold, to say that it’s a market driven by hoarding in Asia, Glenn Beck followers, whatever.


Tue, 09/13/2011 - 17:29 | 1665347 ReactionToClose...
ReactionToClosedMinds's picture

Paulie the K forgot to reference Donald Rumsfeld's 'office' copy subscription cancellation of the NYTimes in response to Krugman's 'gracious' Sept. 11 memorial blog  along with GBeck followers.


When is Krugman going to start going after Ron Paul .. who has more principle than Krugman can imagine?

Tue, 09/13/2011 - 17:11 | 1665271 Tyler Durden
Tyler Durden's picture

Yes. Our collective head exploded as well.

Tue, 09/13/2011 - 17:21 | 1665304 GenX Investor
GenX Investor's picture

TD - how would Short Squeeze play into Quad Witch this Friday if Euroland implodes a the same time?

Tue, 09/13/2011 - 17:26 | 1665333 Tyler Durden
Tyler Durden's picture

Buy cheap straddles on everything that is not nailed down.

Tue, 09/13/2011 - 17:36 | 1665369 ReactionToClose...
ReactionToClosedMinds's picture

a very long time ago .... a solid mutual fund builder named Bill Berger kept getting told by one his brokers (at Mother Merrill no less) that then Major Market Indices (through 80s MMI was big index vehicle at the time ... rumors had it that the 'first' Plunge Protection Team ..... coordinated by one Rbt Rubin et al, in October 1987 on an approaching lunchtime lull on Tuesday after big crash ... jammed buys of MMI to torch the shorts to reverse the dynamic) puts were cheap while market risk was rising starting early 1987.

Berger followed his advice finally and bought cheap puts as a more direct form of then Wall Street genius touted Portfolio Insurance. For like 10 years after 1987, Berger funds had an outsized performance mismatch against almost all peers purely because of that move.

Tue, 09/13/2011 - 19:24 | 1665604 SwingForce
SwingForce's picture


MMI or XMI Amex Index, futures traded on CBOT had Big MO in it...DOW wouldn't license precious "name" for index options, so XMI did with 20 stocks...but the real story is that CBOT was independent of CBOE and stayed open. Good for you RTC your memory serves you well. Not sure VIX was invented yet LOL.

Tue, 09/13/2011 - 23:02 | 1666135 ReactionToClose...
ReactionToClosedMinds's picture

now that is a classic (The Missiles of October from "April Fools")

so many had to pack boxes so suddenly out of Drexel

 who can ever forget .... "Lock & Load" circa that era ...  at least  back then people wore being an 'asshole' on their sleeve and said f'**k you ...stop me


Tue, 09/13/2011 - 18:46 | 1665533 TradingJoe
TradingJoe's picture

"@ a boy"!

Tue, 09/13/2011 - 20:26 | 1665678 IQ 145
IQ 145's picture

No reason for the head to explode it's a rational and understandable article. Zero interest rates are undoubtedly a very important driver for the PM's. I would say PM's reflect un-certainty and fear. There are whole classes of investments; representing a lot of money for a lot of people who have money, that "may" come un-stuck; or seriously un-glued. If you get tired of worrying about it and you're in a zero-rate environment; metals look pretty good.(No Counterparty). It's well established that Gold does very well in deflationary crashes, for instance; the key word here being "crash". There's nothing surprising about the general opinion as to the meaning of gold prices, ( an inflation indicator), being wrong; Virtually everything everyone believes on this blog is wrong. The vast majority of these people believe the price of the metals is "controlled" or "manipulated"; which is just infantile nonsense.

Tue, 09/13/2011 - 17:14 | 1665280 Motley Fool
Motley Fool's picture

after a quick read.

No he is saying gold is in a bubble, in different words.


krugman = idiot.

Tue, 09/13/2011 - 17:20 | 1665296 SheepDog-One
SheepDog-One's picture

I dont know, Im starting to wonder what the 'value' of gold really is if no one is going to use it to back a currency....$1900? $200? Its a chunk of metal, yes....what else is it REALLY?

Well, anyway its obvious to me PM's will have to be held for many years at this point. No one wants a gold backed currency, so we'll first have to see Mad Max doomsday worldwide, then rebuild into something, then maybe back currency with gold. Until then, it seems to be a paperweight.

Tue, 09/13/2011 - 17:25 | 1665303 Motley Fool
Motley Fool's picture

It is pretty much useless otherwise. and that is exactly why it is valuable. ;)


keep in mind. there is a legitimate need to store value through time.


If you hoard anything with use you are effectively screwing someone out of something usefull (marginal user).


Gold's uselessness, other than store of value, serves that very real need. stock-to-flow. :)

Tue, 09/13/2011 - 17:25 | 1665332 SheepDog-One
SheepDog-One's picture

Right, my point being it seems like a long time before its 'put to use', until then may as well just put it in the safe and ignore it for a year or so.

I see these guys with their minute to minute entire websites and blogs devoted to the latest news on gold and real time quotes...what does it matter? We've got a world of things that have to happen first before gold is the world currency backer. And may never be even at that.

Tue, 09/13/2011 - 17:30 | 1665353 Motley Fool
Motley Fool's picture

You are quite correct, realtime worries about the pricemoves of gold are irrelevant.


Also, be carefull with the concept of gold backing a currency. A gold standard is a terrible idea.

On the other topic, time, it wont take that long. The dollar system has reached a point of no return mathematically. Once it collapses gold will come into play again.

Tue, 09/13/2011 - 17:52 | 1665411 DoChenRollingBearing
DoChenRollingBearing's picture

+ $1830 and green to Motley and SheepDog.

Gold has its own intrinsic value.  There are lots of people who just WANT it!  Short term price movements do not mean much (although the direction of gold HAS been very favorable for a decade).  Buy physical gold while you can.

Gold Standard?  Bearings say: No gracias!

Tue, 09/13/2011 - 19:21 | 1665598 Chaffinch
Chaffinch's picture

People have lusted after gold, killed for gold, hoarded gold, WANTED gold like nothing else, for thousands of years. We're not very far from our ancestors even if we (as a culture) also want ipads and plastic crap from Walmart - and we have the same basic desire to store our wealth. Gold has always been a great store of wealth and until we evolve into a different species it always will.

Tue, 09/13/2011 - 17:33 | 1665361 Sequitur
Sequitur's picture

Gold looking bubbly, and yes I own gold and silver. Took some profits, make open some GLD puts/leaps. Risky, but look at the chart.

Tue, 09/13/2011 - 18:14 | 1665471 fiddler_on_the_roof
fiddler_on_the_roof's picture

screw the chart. I am betting against 99% of the Gold traders the other way.

Tue, 09/13/2011 - 18:22 | 1665486 Sequitur
Sequitur's picture

Meaning, you're long? Sorry, didn't understand your sentence.

Tue, 09/13/2011 - 18:04 | 1665448 MrSteve
MrSteve's picture

Similarly to your expectations for gold-backed currencies, no one ever expects the Spanish Inquistion.

Why have central banks from places like India and Korea been buying gold by the ton at recent elevated prices? Why did our buddy Hugo call for the repatriation of Venezuela's gold (aside from court judgements to compensate for confiscated - err, nationalized, foreign asset-holdings?)

Gold is the standard by which all commodities and currencies are cross-referenced. That you can't see that, along with billions of others, is the main reason it will happen.

Follow the yellow brick road, advice from a children's parable during the last gold standard fight.


Tue, 09/13/2011 - 19:07 | 1665576 Reptil
Reptil's picture

on silver shoes!

It's very clear to me. Central Banks, and TPTB are trying to get as much gold and silver as they can, without spooking anyone.

Do what they do, not what they say. It's a process of elimination. And so it will go with most of the people on this planet. The smart and lucky make it, and fiat is in a huge bubble about to pop. Of course one shouldn't hold gold longer than required. Sell when EVERY LIVING SOUL wants to buy. The way things are going right now that will be soon, but perhaps it'll take a year or so.

Silver is going to be even more wanted after the collapse. So I'll hold on to that.


Tue, 09/13/2011 - 19:30 | 1665611 treemagnet
treemagnet's picture

I agree, especially the silver part.  Folks just gotta keep averaging in and don't look up - I'm later to the PM's than I wish, but not done buying pm's either.

Its a marathon, not a sprint!

Wed, 09/14/2011 - 04:29 | 1667279 Overflow-admin
Overflow-admin's picture

Rule 1: Cardio

Tue, 09/13/2011 - 19:11 | 1665586 Two Towers AU AG
Two Towers AU AG's picture

Yea but at least you can throw a paperweight to scare the Zombies.. bet ya can never do that with a FRN

Tue, 09/13/2011 - 20:28 | 1665681 Stax Edwards
Stax Edwards's picture

You make an important point SD-1, and at the risk of the Ire of all the phyzz guys I have the following piece of advice:

If you are not committed to that trade, ie, you ain't selling if the price drops like a rock, be aware that the price coin shops will pay vs spot declines dramatically in a bear market.  Not knocking stacking PM's by the way, just saying that the real utility of buying paper gold is if you need liquidity.  If you are trying to make more fiat buying physical just be aware of the liquidity issues in a falling market. And furthermore I am not saying it is gonna fall, just be aware ol Joe down at the corner coin shop may go on vacation if gold gets hammered. Hedge appropriately.

Tue, 09/13/2011 - 19:31 | 1665610 razorthin
razorthin's picture

Oh I think I can make this fit.  Krugman is undoubtedly capitulating on his refusal to recognize biflation.  It's no mystery that as fiat is fervently spewed with no concomitant growth and no one willing to write off losses, PMs and other commodities will rise as the store of value.

Tue, 09/13/2011 - 17:06 | 1665254 Skid Marks
Skid Marks's picture

Tyler: the editorial comment is interesting, amusing and, sadly, probably spot on.

Keep On Truckin. 

Tue, 09/13/2011 - 17:25 | 1665330 Josh Randall
Josh Randall's picture

I'm sorry did you say something? I couldn't read with all the *cough*..errr..uhhh..distractions

Tue, 09/13/2011 - 19:39 | 1665619 disabledvet
disabledvet's picture

Actually i think you could have better boobs than those. And where are the leg shots anyways? No one does legs around here...

Tue, 09/13/2011 - 21:44 | 1665918 Beam Me Up Scotty
Beam Me Up Scotty's picture

So many critics of women and their tits.  Too big, too small, they aren't real etc.  If you are willing to show them off, who am I to criticize?  Nice tan lines!!

Tue, 09/13/2011 - 17:08 | 1665256 malikai
malikai's picture

Wow those calls are pretty cheap on BAC. That might be good for a little punt.

$0.69 Oct 7.

Tue, 09/13/2011 - 17:07 | 1665257 vote_libertaria...
vote_libertarian_party's picture

My fellow traders theory.


Wall Street is cranking out these 'Europe saved rumors over the past week to build huge short positions.  They control a chunk of the ST lending that is proping up the Euro banks.


They KNOW which Euro banks will collapse soon.  They will shut off the overnight lending.  They are laying big bets.


Good work if you can get it.

Tue, 09/13/2011 - 17:07 | 1665258 lynnybee
lynnybee's picture

this is the perfect time (again) to remind everyone what my Grandma Jo (born 1915, god rest her soul) said to me as a child.   she was a product of the GREAT DEPRESSION & got up @ 3:30 a.m. to get started baking for the restaurant that they owned.    she was fiercely anti-government & NOW I KNOW WHY !!! 

" Do not trust the government & never go into the stock market , "  Grandma Jo .

Tue, 09/13/2011 - 17:10 | 1665268 SheepDog-One
SheepDog-One's picture

Damn straight!


Tue, 09/13/2011 - 17:58 | 1665430 DoChenRollingBearing
DoChenRollingBearing's picture

@ lynnybee,

+ 1

Now we get to learn the same damn thing.  For a long time, it seems that each MONTH .gov keeps getting worse and worse.  Liars and banksters and bought off Congress.  When I become a grandparent:


Tue, 09/13/2011 - 20:31 | 1665685 Tater Salad
Tater Salad's picture

RIP to Grandma Jo, but F-K, if only she could have just gone long and strong the SPY since then.  Oh well, hind sight is always 20/20.



Tue, 09/13/2011 - 20:33 | 1665686 Tater Salad
Tater Salad's picture

err, I mean spx, err I mean DJIA, you get my point..

Tue, 09/13/2011 - 17:08 | 1665260 Traianus Augustus
Traianus Augustus's picture

What makes anybody think that it isn't the Fed and their banks that aren't positioned on the short side?  Wasn't Lehman put out by the other banks shorting the $hit out of it?

Tue, 09/13/2011 - 19:06 | 1665575 sgorem
sgorem's picture


Tue, 09/13/2011 - 19:13 | 1665591 SheepDog-One
SheepDog-One's picture

Yep sure could easily be!

Tue, 09/13/2011 - 20:53 | 1665711 scatterbrains
scatterbrains's picture

somebody tip me off when the BAC waaay out of the money puts open for trading.. or have they allready ?

Tue, 09/13/2011 - 17:08 | 1665264 SheepDog-One
SheepDog-One's picture

How can anyone with any money believe the US equity markets 'still play by the rules'? 

What is the rule for multi millionaires in this must be certified full retard?

Tue, 09/13/2011 - 17:22 | 1665312 Ruffcut
Ruffcut's picture

I'm only a third degree retard.  The further levels are harder to obtain, so I hear. I do feel full certification is in my future.

BOught BAC puts, because I have been for months hoping and praying they will not be spared.  It is the new american dream.

Tue, 09/13/2011 - 20:36 | 1665691 Tater Salad
Tater Salad's picture

Hey, Sleeping with SheepDogs..."what's the rule for multi millionaires in this must be certified full retard?"

Considering most of the ultra-affluent in the U.S. are that way due to starting a small business or inventing something, I think you might want to reconsider your aformentioned comment as it makes you look like the 'tard.



Tue, 09/13/2011 - 22:22 | 1666064 dwdollar
dwdollar's picture

Really?  Most multi-millionaires I know got that way through inheritance.

The rest got that way by shipping jobs to China.

Economic/Social mobility is dead genius.

Tue, 09/13/2011 - 17:09 | 1665265 Motley Fool
Motley Fool's picture

being long golds isn't the only way to fight the fed. buying physical gold is.

Tue, 09/13/2011 - 17:15 | 1665276 Dr. Engali
Dr. Engali's picture

These shorts are fucking stupid. How many times do they have to get their asses handed to them before they finally get it. You can't fight the world's largest hedge fund that can print an unlimited unlimited suppy of money.

Tue, 09/13/2011 - 17:16 | 1665285 SheepDog-One
SheepDog-One's picture

I hear ya! Im about sick of markets teetering on the cliff, only to find fukin FUNDS have once again lined up like idiots to pile all-in short for the ensuing guaranteed short squeeze! 

Tue, 09/13/2011 - 17:22 | 1665315 Dr. Engali
Dr. Engali's picture

I'm in the same boat. I know this market is way over valued but I sure as hell won't set myself up fir a big squeeze.

Wed, 09/14/2011 - 04:32 | 1667289 Overflow-admin
Overflow-admin's picture

Do you mean a big sQEeze?

Tue, 09/13/2011 - 17:21 | 1665310 drivenZ
drivenZ's picture

not sure what some of you are talking about...Anyone short the broader market since late july/early August(even 6 months prior) is still up. 


I for one would love to see a massive rally the next week or two. Would love to build up a big short going into October. 

Tue, 09/13/2011 - 17:33 | 1665359 mynhair
mynhair's picture

... and lo!  The market drops, you close for a 2% gain, and stop the fall!

You bought the only 100 shares out there being traded!

Go pat yourself on the back....

Tue, 09/13/2011 - 17:34 | 1665363 Eireann go Brach
Eireann go Brach's picture

Brian Mc O'Moniyhan the poor irish bastard is in way over his head! Grab yourself a plane ticket Brian and head to the emerald isle for an extended vacation, purchase an annual supply of Guinness and tell the powers that be to go fuck themselves and let B of A rot to hell.

Tue, 09/13/2011 - 19:52 | 1665628 disabledvet
disabledvet's picture

He appears to have a "fwiend in Wome." how about you?

Tue, 09/13/2011 - 17:34 | 1665364 LookingWithAmazement
LookingWithAmazement's picture

BoA will be bailed out. No Armageddon.

Tue, 09/13/2011 - 17:46 | 1665393 traditionalfunds
traditionalfunds's picture

Except this bail out is going to have equity wipeout, bondholder haircuts, & significant US government stake. GM redux.

It may not be armageddon compared to a bank run. But it will feel like it if you hold worthless shares.




Tue, 09/13/2011 - 18:54 | 1665550 TradingJoe
TradingJoe's picture

After the big boys are out(Buffet/Paulson etc) BoA will be let go of, 15/20 bucks higher from here BUBBA!

Tue, 09/13/2011 - 17:51 | 1665407 mynhair
mynhair's picture

" And anyone trading stocks, on either the long or short side, is guaranteed to lose."

Epic BS when you are co-located.

Can bid your 100 shares to yourself forever, and if someone else wants to sell, you sub-penney the fool.

Tue, 09/13/2011 - 17:52 | 1665410 HedgeAccordingly
HedgeAccordingly's picture

bend over. 

Tue, 09/13/2011 - 17:53 | 1665412 The Deleuzian
The Deleuzian's picture

Iv'e resisted over the past several years to just 'put my index fingers into my ears' and refuse to hear it was ever possible...that computerized trading morphed into such a con-game....

However, limit testers such as myself can't help but test just one more time....growth investors, dividend warriors, P/E justifiers, you name it have gotten their britches burned beyond recognition!!!

So, are we to believe the Mo Mo companies like PCLN will forever have more interest, higher market cap's, out of wack P/E's and a brighter future than companies like GG or almost DOW 30's like CAT....?

"Affirmative, make it so! The central planners cry!!!

"You can fit a square peg through a round hole, you just have to push really hard!!!!!"


Tue, 09/13/2011 - 18:05 | 1665435 mynhair
mynhair's picture

Momos only go into issues no sane person would touch.  Less competition that way.  You can dick with the robots on lighter traded issues.


Tue, 09/13/2011 - 17:54 | 1665418 ParaZite
ParaZite's picture

30,000 low teir criminals will soon be out of a job via BOA... I can't say I'll shed a single tear if the whole criminal organization falls flat on it's face.

Tue, 09/13/2011 - 17:59 | 1665419 monopoly
monopoly's picture

Excellent post. I have not shorted this market for eons. I have been lusting to short it for a long, long time. I post every week, more for myself, that I am not short stocks. Makes me feel better if I keep repeating it. This way I am tempted less. I cannot believe so many think this is a real market. From my perch, there will be QE3 next week in some shape or form. Has to happen. Otherwise it is the end game. QE will occur now. If he waits too long then he is accused of political posturing and the Fed cannot have that. So it is going to happen soon. I do think it starts next week. And then we ramp up.

But also agree you can fight these morons, with physical gold and silver. It has been working for us for years now. What makes anyone think it is going to stop anytime soon. You all know how Central Bankers operate. They will continue on the same path together until they all step on the one land mine that will blow them all up. Today was a perfect example of their collective idiocy. Even Tyler sounded frustrated and we all know there is not much that rattles his cage.

I also think this time, QE will not work but for a short period of time. A week, a few weeks, I do not know. But then, I will be on the lookout for the best shorting opportunity since 2008, which was fun for many of us. Until that time, I do not buy stocks, except miners, maybe a little oil but that is it. I buy physical gold and silver on a regular basis and will continue to do so. I am fighting the Fed, will continue to fight them and I will win. My family will be protected and when this is all over, maybe sanity will rule. Until then, I am not changing my game plan! Let those who think I am wrong continue there senseless dribble. It never bothers me. In fact, as long as they are here it just makes me more certain that I am on the right track. The train will be leaving the station at some point, many here will be on it. Gotta feeling Tyler will be in the first car. I feel sorry for those who think this will all turn out well. In all my years on this planet, and that is quite a few I have never seen our system so broken, so corrupt and so beyond repair. But I have to think that at some point our children will be OK. As long as I am alive I have to think that.

Tue, 09/13/2011 - 18:08 | 1665458 mynhair
mynhair's picture

" think that at some point our children will be OK. As long as I am alive I have to think that."

May you live long and prosper.

How do you feel about unicorns?

Wed, 09/14/2011 - 04:36 | 1667314 Overflow-admin
Overflow-admin's picture

But I have to think that at some point our children will be OK. -> I may fall in the children will be OK category. Also buying silver and gold on regular basis.

Excellent post you too monopoly.

Tue, 09/13/2011 - 18:07 | 1665455 Yogibear101
Yogibear101's picture can't eat didn't come out right.

Tue, 09/13/2011 - 18:09 | 1665460 mynhair
mynhair's picture

Bart as an 'investor'.  ROFL!

Tue, 09/13/2011 - 18:18 | 1665477 vegas
vegas's picture

Never have and never will own or trade an individual stock.
As Gordo Gecko once said, "He doesn't know the difference between livestock and preferred stock."
Between the various stock indices, forex, and the PM's, if you can't make money with this volatility, then hang it up and try something else.

As to BAC, who gives a shit? Why get opinionated with a TBTF bank on Fed life-support? I'm going out on a limb here and supposing that making money is the primary objective of being involved in this turkey.

My advice is to move on to better trades.

Tue, 09/13/2011 - 18:22 | 1665487 mynhair
mynhair's picture

Got a better trade?  I'm a gazzilion Ears.

Tue, 09/13/2011 - 18:38 | 1665520 vegas
vegas's picture

1) BTFD in gold and silver,
2) Sell the Euro on rallies - not breaks, and
3) spread trade the stock indices.

Tue, 09/13/2011 - 20:39 | 1665695 Tater Salad
Tater Salad's picture

errr, your short BAC trade is a tad late to the party.  I too agree that that is one of the dumbest ones going right now and will laugh when the shorts get their faces ripped off.  Nothing personal, just need to be flexible.

Tue, 09/13/2011 - 18:19 | 1665481 The Deleuzian
The Deleuzian's picture

I'm starting to see the futility of it all... I was very tempted to conjur up a deal with my friend at the local coin shop stand and buy up all the common morgans amd peace dollars he had in his rotating display case (you know the ones!)  Even the coins that looked like they spent the last 80 years at the bottom of the sewer!!!

Tue, 09/13/2011 - 18:23 | 1665490 HD
HD's picture

Wait...I must be missing the point. ZH is saying eurozone is going to implode but the S&P will not?

Tue, 09/13/2011 - 18:35 | 1665510 Robslob
Robslob's picture

Hedge Funds will be extinct by end of year:

Tue, 09/13/2011 - 18:36 | 1665515 tkinfo
tkinfo's picture

Dear Genemarchbanks,

We are. BofA, and 12 other money center commercial and investment banks world wide. All are going to Zero. Nonperforming debt on both sides of The Pond involving sovereign debt (there) and mortgage backed securities (here) is greater then even the government's ability to bail out.

Tue, 09/13/2011 - 18:40 | 1665518 Dingleberry
Dingleberry's picture

"To short or not to short...that is the question".  Of course the Fed is going to save B of A when the time comes. And it's coming. And fast.   B of A is a helluva lot bigger now than 2008, so it would be completely antithetical to Heli-Ben to let it go down. It would be basically saying that all the bailout shit we did before is not worth doing again (i.e. FAILURE).  But that does not mean the stock won't get smashed.  I can envision receivership or a resolution trust corp just like we had in the 80s-90s.  So, the bank buildings will survive. Monihan will get his golden chute.  The stockholders will take it in the ass....un-lubed.  And the bondholders will get hammered. Except Uncle "bath tub" Warren.

Tue, 09/13/2011 - 18:42 | 1665527 Albertarocks
Albertarocks's picture

The entire new body of short positions was put on by Goldman Sachs and JPM, so don't sweat the small stuff.

Tue, 09/13/2011 - 18:49 | 1665542 Cult_of_Reason
Cult_of_Reason's picture

The shorts are packed like the sardines -- the most crowded one-sided trade since 2009 (when the shorts shorted the stock market in anticipation of financial Armageddon, commercial real estate collapse, and widespread bank nationalizations -- none of those expectations materialized and the shorts were put through 100%+ extremely painful short squeezing procedure).

Tue, 09/13/2011 - 19:03 | 1665573 TradingJoe
TradingJoe's picture

This time it's different, eh?! :))))

Tue, 09/13/2011 - 19:13 | 1665577 Cult_of_Reason
Cult_of_Reason's picture

Is it safe shorts?

Is it safe to be packed like this in one-sided 14.86 billion shares crowded trade a week before Bernanke's QE3 announcement?

Is it safe?

Tue, 09/13/2011 - 19:01 | 1665564 george
george's picture

I'm game. I'll buy WFC tomorrow AM and be out before the weekend.

Tue, 09/13/2011 - 19:02 | 1665570 treemagnet
treemagnet's picture

Finally, the bears are turning into bulls - now maybe I'll get my crash!  Watched pots don't boil - and pm's will go up huge over time cause printing is the path of least resistance for Ben's ponzi world.

Tue, 09/13/2011 - 19:20 | 1665600 razorthin
razorthin's picture

Good point Tyler.  It's very hard to trade a downtrend with the Orcs lurking.

Tue, 09/13/2011 - 19:30 | 1665612 Downtoolong
Downtoolong's picture

Bank Of America. Doomed company and stock? Absolutely. But is it overdue for another massive ripfest before it's lights out.

The latest gambling vehicle in a long line of gambits using other people’s money. Even Buffett won’t be able to control the fireworks on this one. Which is exactly why any manager who still holds BAC shares in a blue chip equity fund should be fired tomorrow.

Tue, 09/13/2011 - 19:35 | 1665617 miker
miker's picture

Owning physical gold and silver (poor man's gold) will only payoff if the central banks and governments mess up in their efforts to right the ship.  I have no idea how it might take place; just know from history that it certainly can happen  Geitner can't keep doing this worldwide orchestration forever and then some dumb fuck (like Paulson) could take his place and screw things up.

A major economic collapse is probably a low to medium risk event because...while the consequences would be very, very high, the probability is on the low side as long as all the central banks and main governments are working together.  Still, by even keeping a small portion of your assets in physical, you would be miles ahead if it occurred. 

Don't put all your eggs in one basket.  Have some physical on hand but don't get carried away.

Tue, 09/13/2011 - 21:38 | 1665879 treemagnet
treemagnet's picture

I hear what you're throw'n down, but heres where I just flat out disagree.  Central banks print.  History is clear on this - they print, print, and print some more.  You can, with PM's, bank on it.

Wed, 09/14/2011 - 04:44 | 1667364 Overflow-admin
Overflow-admin's picture

It will not only payoff in collapse mode, but also in Financial Repression mode (google it, read Daniel Amerman and then compare with what happened in Switzerland since spring 2011).

Gold and silver in CHF shot up each time SNB interviened. And now that the CHF is pegged to the EUR the price rises each time EUR falls.

Tue, 09/13/2011 - 19:59 | 1665637 Mallenet
Mallenet's picture

Sorry - time zone difference!

But I cannot believe - A USA bank made a mistake and has no rescrue in place?

OK - if it happens I suspect Rambo or Arnie will rescue the world with 'Pump', backed by heli-whatsits from the financier of Charlie's Angels: Ben-Dover USA!  Reck-tum: no! Made them beg - Yes (don't it make your brown eye: blue! There is a Chinese song in there somewhere)!

Do you love the 'blues'?  Have you heard Chinese blues?

Bye bye American pie ....

Tue, 09/13/2011 - 20:28 | 1665680 flyr1710
flyr1710's picture

wait..everyone on my stream is always right and always making money long or

Tue, 09/13/2011 - 20:44 | 1665699 Sophist Economicus
Sophist Economicus's picture

"And anyone trading stocks, on either the long or short side, is guaranteed to lose."

Well said!

Tue, 09/13/2011 - 20:52 | 1665707 Tunga
Tunga's picture

"She might be gone tomorrow. Honey say what you gotta say." - Woman of the world - Aerosmith - Get your Wings


Tue, 09/13/2011 - 20:54 | 1665716 Tunga
Tunga's picture

"Don't alienate your base." - facebook to Prison Planet.


Tue, 09/13/2011 - 20:56 | 1665726 Tunga
Tunga's picture

"Nope... No weapons of mass destruction over there!." - George W. Bush.

Tue, 09/13/2011 - 21:08 | 1665784 gkm
gkm's picture

Never fear shorting because of a large short interest.  W.D. Gann (paraphrased)

For every short there are two longs.  I'm not saying BAC is a short here, since I haven't looked at the chart lately, but financials in general are indicated short on the weekly chart.

Tue, 09/13/2011 - 21:20 | 1665813 T-Bond
T-Bond's picture

Tyler is right. To be exact, since the spring of 2003 when Greenspan flooded the markets with massive liquidity, the stock market has been manipulated, abused, pillaged, looted and raped beyond belief. Since that time price discovery has been for the most part drowned out. Yes there have been spurts of real price discovery ala 4 quarter 2008 into 1st quarter 2009, but for the most part it has been a revolving door for anyone trading it.

Wed, 09/14/2011 - 02:21 | 1666728 bid the soldier...
bid the soldiers shoot's picture

I'm pretty sure the market was manipulated, abused, pillaged, looted and raped beyond belief before the spring of 2003.

Tue, 09/13/2011 - 21:19 | 1665814 Stack Trace
Stack Trace's picture

I am confused and probably not too intelligent.

After 1 year of watching 16 ETFs/STOCKS including EUO, IAU, GLD, GLL, FAZ, XLF, TBT, TLT, USO, BP, NLY, CYS etc... I figured out I might be able to make some money day-trading.

2 weeks ago I started my strategy an in 34 trades, 1 losing trade for a small amount, 33 wins.... I am up 19% on my total portfolio. Maybe I should just stop where I am. Maybe very lucky. ;-)

I am nervous about a short-squeeze and not in now and back to cash. At least i made more in the last 2 weeks than my 401K in the last 10 years.

Long gold and it has served me well.

Tue, 09/13/2011 - 21:34 | 1665867 chirobliss
chirobliss's picture

This is all very entertaining to watch...

Monday: OMG we're all gonna die get me out, get me out...


Tuesday: Hey the world isn't ending, this is awesome, I'm gonna order one of them new Bentley SUV's


Wednesday: OMG we're all gonna die,cancel the Bentley and get me the f..., Oh,what's that you say, the Chinese?  really? Buy everything quick and where the hell is my new Bentley?

Wash, rinse repeat etc.

Tue, 09/13/2011 - 21:38 | 1665876 chirobliss
chirobliss's picture

Sorry, my mistake...


Monday 9 am: OMG we're all gonna die get me out, get me out...


Monday 10:30 am: Hey the world isn't ending, this is awesome, I'm gonna order one of them new Bentley SUV's


Monday 11:45 am: OMG we're all gonna die,cancel the Bentley and get me the f..., Oh,what's that you say, the Chinese?  really? Buy everything quick and where the hell is my new Bentley?

Tue, 09/13/2011 - 22:11 | 1666041 jelyfish
jelyfish's picture

I would like to thank all the traders engaged in the BAC 7.00 War!  It's a blast to watch.  GO BEARS!

Tue, 09/13/2011 - 22:54 | 1666166 beaker
beaker's picture

Here’s a scenario:  EU Banks fold in succession and money floods into USD and buys… stocks – not bonds. The stock market rallies from inflows from bond sellers which catches shorts off balance and sends them covering adding to the rally.  Sellers are already out of this market after August volatility.   In this epic monetary collapse, everyone refuses to believe that stocks could go up. 

Why?  Not because the economy is great....

For the same reason as gold!  Investors want to hold equity instead of confederate USD money and sucker bonds. It’s the only place to go.

Tue, 09/13/2011 - 22:55 | 1666168 beaker
beaker's picture

Here’s a scenario:  EU Banks fold in succession and money floods into USD and buys… stocks – not bonds. The stock market rallies from inflows from bond sellers which catches shorts off balance and sends them covering adding to the rally.  Sellers are already out of this market after August volatility.   In this epic monetary collapse, everyone refuses to believe that stocks could go up. 

Why?  Not because the economy is great....

For the same reason as gold!  Investors want to hold equity instead of confederate USD money and sucker bonds. It’s the only place to go.

Tue, 09/13/2011 - 23:49 | 1666349 unununium
unununium's picture

> But is it overdue for another massive ripfest before it's lights out.  Guaranteed!

I got all day.

It's a POS.  It needs to be shorted.  Let's have a little conviction.

Wed, 09/14/2011 - 00:16 | 1666404 lano1106
lano1106's picture

Sept 12:


This should be an iron proof that Tyler is right!


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