Speculative Trading Activity Adds Fuel To Narrow-Breadth Short-Squeeze

Goldman Sachs' new Speculative Trading Indicator shows a recent increase in high-risk activity within the US equity market.

As top Goldman trader Nelson Armbrust explains, the indicator is constructed based solely on trading volumes.

Specifically, it is calculated as the indexed and re-scaled first principal component of monthly changes in the proportion of US public equity dollar trading value attributable to: