Short Squeezes Can't Carry On Forever

Authored by Simon Whit, Bloomberg macro strategist,

A significant source of equity buying in this cycle has come from short covering. As short-interest ratios bottom, one key support for the market is drying up.

Being short stocks has not been fun in this cycle. Relentlessly rising prices has made holding short positions increasingly intolerable, so it’s no surprise more and more short sellers have thrown in the towel.