Many market participants are looking dumbstruck at the miraculous surge in Dow Transports, Small Caps, and Homebuilders this week off the bond-short-puke lows of Wednesday morning. The answer - sadly for those who believe this is presaging new new highs and utopia once again - is that this was the biggest weekly short-squeeze in 11 months... and more troubling for the bulls - it ran out of steam today.
"Most Shorted" stocks (BBG Ticker GSCBMSAL Index) rose 3.3% on the week...
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...with a 7.1% swing intra-week off the bond-short-puke lows...
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This is the biggest squeeze in 11 months (after last week's biggest drop in 3 years)
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But... a quick glance at the top chart shows the squeeze has run its course (and today's considerable weakness in Small Caps)...
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Trade Accordingly
