Shorts Refuse To Capitulate: End Of September NYSE Short Interest Near Record Highs

Tyler Durden's picture Submitted by Tyler Durden on 10/12/2010 11:47 -0500

New York Stock ExchangeNYSE Short InterestShort Interest

The one side-effect of the torrid market move over the past 40 days that every bull had been hoping for, a massive, and self-sustaining short covering spree, has completely failed to materialize. Despite what is now a 10%+ move since early September, predicated by nothing more than the dollar debasement and QE2 expectations, NYSE short interest remained virtually unchanged for the past 30 days, starting the month at 14.36 billion shares and ending the month at14.35 billion! In other words, the shorts’ conviction that the rally is based on nothing fundamental is as strong now as it was when they were 10% more in the money. And that they are willing to experience such pain reinforces their expectation, right or not, that the market is way overbought and is due for a major pullback.

As for the observation that neither retail, nor long-only, nor short-covering was a buying force in the September rally, once again begging the question just who did all this buying, we will leave that open.

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by schoolsout
on Tue, 10/12/2010 – 11:50
#643486

Way OT here, but TD, have you seen this yet?

Might get interesting…

 

Google Plans Alternative Inflation Index Using Web DataBy: Robin Harding, Financial Times

Google is using its vast database of web shopping data to construct the ‘Google Price Index’ – a daily measure of inflation that could one day provide an alternative to official statistics.

CNBS running this story from FT

Login or register to post comments by beastie
on Tue, 10/12/2010 – 11:56
#643506

That’s nice but I don’t buy milk, booze, smokes or anything that I need for daily consumption on the web. I buy smaller electronics, car parts, gold and silver. Not much of an index except to track the dollar vs. RMB. 

Login or register to post comments by Cognitive Dissonance
on Tue, 10/12/2010 – 12:04
#643532

I buy smaller electronics, car parts, gold and silver.

It’s a bitch trying to find parts for that 62 Beetle, isn’t it? Try Briggs and Stratton. :>)

Login or register to post comments by Fish Gone Bad
on Tue, 10/12/2010 – 14:52
#644110

That is just too funny.  I have a 1960 VW transporter (model 212).  It has maybe 300 total parts, and they are ALL available from http://www.wolfsburgwest.com .  My beast costs practically nothing to maintain.  I doubt the same can be said for many other cars that are on the road.

Login or register to post comments by schoolsout
on Tue, 10/12/2010 – 12:05
#643537

You have a point

and I’m sure a lot of internet sellers data can be skewed one way or another.

Login or register to post comments by Cruel Aid
on Tue, 10/12/2010 – 12:12
#643557

I buy smaller electronics, car parts, gold and silver.

If true, then you are kicking ass! Chem and Data storage tambien.

Login or register to post comments by Racer
on Tue, 10/12/2010 – 11:53
#643491

who did all the buying? ….a tiny amount of buying in S&P overnight futures by manipulators judging by the many overnight gap ups as shown in a previous topic on ZH

Login or register to post comments by pat53
on Tue, 10/12/2010 – 11:53
#643495

more shorts to squeeze only means that markets will go higher. short covering is the only thing pushing the market up. until the shorts capitulate, higher we go.

Login or register to post comments by HarryWanger
on Tue, 10/12/2010 – 11:56
#643503

Agreed. Also, Nasdaq short interest has decreased. Shorts have been throwing in the towel over there. And rightly so. You’d be nuts to short what is essentially the Apple Index.

Login or register to post comments by Cdad
on Tue, 10/12/2010 – 12:02
#643525

Don’t quite get you there, Chief.  The very best shorts are ridiculously over-crowded longs.

I think it is almost exactly the right time to short apple, myself.

 

Login or register to post comments by HarryWanger
on Tue, 10/12/2010 – 12:11
#643553

Playing with fire there. Maybe around 350ish but definitely not here – especially with earnings next week and a sure to be blowout Q. Be patient.

Login or register to post comments by Cdad
on Tue, 10/12/2010 – 13:19
#643708

Oh, I rather think I have been patient with this one, Chief. 

I have watched as this stock has been overbid for months by PMs with little imagination to the point that this stock alone is quite obviously going to tank the NASDAQ.  I have patiently watched as greed has transformed itself into endless hyperprattle, endless upside targets by Apple zombies who quite literally think this company makes the world go ’round. 

I could go on…but why?

It becomes a point of conviction…the conviction that too many of of the above mentioned folk will soon recognize where they are standing.  And when they look around, they will see only one door out.

And I like to be there when that Wall Street Betrayal arrives, chief. 

 

Login or register to post comments by HarryWanger
on Tue, 10/12/2010 – 13:38
#643811

You will be right at some point but at 300 the stock is not overvalued. 350 seems to get a little hot and provide a nice entry point for a potential short. Especially after year end. Nobody is dumping AAPL going into EOY reports.

Login or register to post comments by geminiRX
on Tue, 10/12/2010 – 14:14
#643942

Never trade on emotion

Login or register to post comments by Cruel Aid
on Tue, 10/12/2010 – 12:16
#643564

Free Ipads. Don’t shoot the horse in the final stretch!

Login or register to post comments by SheepDog-One
on Tue, 10/12/2010 – 12:43
#643648

Nasdaq you mean that scam Madoff invented?

Login or register to post comments by egdeh orez
on Tue, 10/12/2010 – 11:57
#643507

+1

Login or register to post comments by Lux Fiat
on Tue, 10/12/2010 – 11:57
#643508

Yep.  Was thinking that it is not good news for bears.  Don’t have access to longer term charts of NYSE short interest vs. SP-500 – have there been any significant drops where short interest levels were pretty high just before going into it?

Login or register to post comments by egdeh orez
on Tue, 10/12/2010 – 11:57
#643509

+1

Login or register to post comments by system failure
on Tue, 10/12/2010 – 12:08
#643545

but the shorts are not capitulating….

Login or register to post comments by frankTHE COIN
on Tue, 10/12/2010 – 11:58
#643504

All the shorts know the secret Zero Hedge Handshake.

” This time its different “

            VS

” This will end badly “

Login or register to post comments by system failure
on Tue, 10/12/2010 – 12:15
#643567

It appears the shorts are calling Benny’s bluff as well as the bond market. Benny is behind the eight ball now, and he knows it. He is simply fucked at this point. 1 trillion in excess reserves, gov’t crying for the  banks to lend it and force inflation. However, nobody is borrowing cuz they are either tapped out, or simply don’t want things as badly anymore. Their social mood has changed. Deflationary pressure is here to stay if nobody borrows.

QE 2 is a blow job with no tongue!!!!

It wont happen since reserves are already to high and the Fed has no exit strategy planned. SO NOW WHAT BEN? WTF are you going to do now. KILL THE DOLLAR SOME MORE? THEN RISK LOSING IT ALL? GAME OVER MAINGS, GAME OVER MAINGS.

I can now see now when the selling starts, it will be sucking so hard with a such a vacuum, that Ben will want to use some tongue then. However, it will be too late…….You big tease, BEN>>>>

Login or register to post comments by SheepDog-One
on Tue, 10/12/2010 – 12:30
#643606

Wish I could thumbs up posts, youre exactly right! In my opinion anyway. Record hi shorts with insider selling at 2,000:1, like no one knows anything? I bet the shorts are the insiders, banksters, FED etc themselves positioning to gobble up all these Hindu bulls!

And the killer news will be- ‘Sorry, no Q/E2’. 

Login or register to post comments by John McCloy
on Tue, 10/12/2010 – 11:59
#643514

Ben: We Must Double our Efforts!!

  Looks like Paulson & Jamie are working overtime keeping financials up today. Either that or shareholders are delighted that Wall Street is only being compensated 144 Billion a mere 4% increase as opposed to last years round of bonuses courteousy QE, Shorts, Manipulation and fradulent accounting.

Login or register to post comments by thunderbird
on Tue, 10/12/2010 – 12:16
#643515

I made this to cheer up those that have been short this past month.

http://sendables.jibjab.com/view/RBLPDFsBhHlNHlWe

It’s a short clip featuring Obama, Geithner, Bernanke, Shapiro, and Becky Quicks take on recent events.

Login or register to post comments by TradingJoe
on Tue, 10/12/2010 – 12:03
#643528

You cannot time the shorting, you are either in or out, otherwise stay out and watch! Given daily front-running and quote stuffing and what not other manipulation, the only chance to make your payday is to be IN with all that pain…there won’t be any time to get in once it’s under way…market psychology doe not work as it used to be anymore, FEDs fucked that up too, do it with options if your funds on’t allow for more outright buying, roll them if you get close to time value depreciation or buy more if you already have an outright build position, that’s how I do it and I still can take quite some more pain but I think I won’t have too, getting closer by the day!

Login or register to post comments by frankTHE COIN
on Tue, 10/12/2010 – 13:09
#643666

I agree. Once it begins you wont be able to catch it.

Login or register to post comments by Dagny Taggart
on Tue, 10/12/2010 – 14:11
#643938

 the only chance to make your payday is to be IN with all that pain

And it DOES hurt. Alot. But “they” are right…until they’re wrong. I’m wrong until I’m right. And I do so love being right. Don’t worry Mr. Wanger, not shorting AAPL. Yet.

Login or register to post comments by Thunder Dome
on Tue, 10/12/2010 – 12:05
#643536

SP 1200

Login or register to post comments by trip nixon
on Tue, 10/12/2010 – 12:06
#643540

Increasing short interest is bearish. People generally don’t short unless they are confident in the long term outlook of their position, since they could face infinite losses. Short-term, sure there could be a little more to the rally, but long-term, I see it as definitely bearish.

Login or register to post comments by hambone
on Tue, 10/12/2010 – 12:10
#643544

Shorts, longs, buyers, sells refuse to sell or buy any longer at these levels…market volume is simply catatonic after opening hour until closing hour ramp (on relative low volume…and then a quarter to third of volume in last two minutes).

Login or register to post comments by Sancho Ponzi
on Tue, 10/12/2010 – 12:09
#643547

I don’t know why anyone would short this market pre-election. Additionally, it’s my opinion Bernanke will be disingenuous as to why he will commence QE2. While he will use the weak recovery as an excuse, his real motivations will be to keep interest rates artificially low and to allow the continued purchase of treasuries issued to fund the monstrous deficit. 

Login or register to post comments by Joe Sixpack
on Tue, 10/12/2010 – 12:09
#643548

Stock players sure have a short time frame. Gold and silver traders have been battling massive shorts for years.

Login or register to post comments by Money_for_Nothing
on Tue, 10/12/2010 – 12:12
#643556

There is something new here. In the recent past the shorts were made to cover.

Login or register to post comments by SheepDog-One
on Tue, 10/12/2010 – 12:26
#643594

The record high shorts are the insiders, banksters, and FED themselves, SURPRISE!!

Login or register to post comments by hambone
on Tue, 10/12/2010 – 12:13
#643563

Ben’s gonna need to create some volatility in this market or all the trading houses are going to starve w/ volumes going down, down, down.

Login or register to post comments by b_thunder
on Tue, 10/12/2010 – 12:17
#643571

and now, as Teppers and BlackRocks realize that the Fed’s train has reached it’s final destination, and start the selling, don’t expect the “shorts”  to start covering when market drops  5, 7 or even 10%.   It will take a much deeper fall…  

My November surprise:  DJIA with 8-handle?

 

Login or register to post comments by SheepDog-One
on Tue, 10/12/2010 – 12:25
#643592

I see it the same way, no reason to cover any shorts because the big payoff is coming fast. With 2,000:1 insider sell to buy ratio, has ANYONE even thought that these record high shorts are the insiders and FED themselves? Theyve done a great job convincing everyone it only goes up and up, their big payday will come not by squeezing shorts more, but by mass murder of all that tender Hindu bull long the markets and asleep!

Login or register to post comments by frankTHE COIN
on Tue, 10/12/2010 – 13:12
#643677

Hammer time !

Login or register to post comments by Lux Fiat
on Tue, 10/12/2010 – 13:23
#643729

That thought has crossed my mind.

Login or register to post comments by Dagny Taggart
on Tue, 10/12/2010 – 14:16
#643951

Of course its the big boys selling. You can screen it by ticker and/or corp. officer at http://www.insidercow.com . Just look at AAPL’s inside selling. I asked if anyone know if they get paid by the bushel. Tim Cook cashed out over fourteen million in last few months. Guess he has Verizon Wireless plan for the family too.

Login or register to post comments by HedgeFundManager
on Tue, 10/12/2010 – 12:20
#643579

Don’t fight the tape, boys. The pain trade is up…holla.

Login or register to post comments by SheepDog-One
on Tue, 10/12/2010 – 12:22
#643585

No analysis of who the shorts really are… Insider selling to buy ratio 2,000:1? Anyone thought yet that the record high short interest is the upward manipulators themselves positioning short to shear and skin the wildly overconfident permabull community which they’ve lulled into total Hindu cow complacency?

Login or register to post comments by scratch_and_sniff
on Tue, 10/12/2010 – 12:23
#643589

I said it many, many moons ago …I AINT SHORTING SHIT!!!!

Login or register to post comments by cjbosk
on Tue, 10/12/2010 – 12:32
#643612

Shorts are getting destroyed in here, pain will continue too!

Login or register to post comments by SheepDog-One
on Tue, 10/12/2010 – 12:34
#643617

Hmmm funny how the shorts arent covering 1 bit huh? What do the record high shorts (insiders, banksters, FED) know that you dont?

Login or register to post comments by SheepDog-One
on Tue, 10/12/2010 – 12:33
#643614

Mid-late October surprise, markets plunge 15% and it was the insiders, banksters, and FED who did all the record shorting…yea I think so.

Obama is set for humiliation and will go for Plan B- Fear and Panic.

No Q/E2 because Ben cant pull it off. He’s lost the deflation battle, time to go all in short.

Login or register to post comments by Caviar Emptor
on Tue, 10/12/2010 – 12:35
#643623

 

Jeffries profit falls 46% on lower trading volume

http://www.cnbc.com/id

 

Login or register to post comments by SheepDog-One
on Tue, 10/12/2010 – 12:38
#643631

A question for all permabulls- Why do you assume they keep pumping up, when no one is buying a thing? It does them not 1 bit of good to pump any price when no one is paying it here, or higher. Their only way to profit now is to shear the Hindu bulls.

Login or register to post comments by Groty
on Tue, 10/12/2010 – 12:43
#643649

I’d be careful assuming even a majority of the short interest is directional bets.  There are a gazillion market neutral strategies that require shorting stock as one leg of a trade (convert arb, risk arb, stat arb, capital structure arb, long/short, etc.).

At least with convertible arb, the PMs try to maintain delta neutral positions by covering on market declines, then put the shorts out again as the market rallies.

I really don’t know what one can conclude from short interest numbers without knowing how much of the universe of stocks sold short are true directional bets and how much is hedging.

Login or register to post comments by Lord Peter Pipsqueak
on Tue, 10/12/2010 – 13:21
#643714

My tea leaves give Fibonacci extension targets from the recent daily flag for AAPL of:

100%-$294

138.2%-$346

150%-$361

161.8%-$377.

So is it nearly over?Probably not.I always look at EURGBP not EURUSD,the correlation with the Nasdaq is more than coincidental,and today EURGBP is again going to the moon.

The printers either side of the Atlantic are falling over themselves to destroy their currency,but I think The Old Lady of Threadneedle Street is winning hands down.

Login or register to post comments by virgilcaine
on Tue, 10/12/2010 – 13:23
#643732

I’ll cover at Dow 500.  Or was it 5k.

Login or register to post comments by Waterfallsparkles
on Tue, 10/12/2010 – 14:04
#643912

If Banks would lend we would see inflation.  But, on the other hand Bernankie knows that if Banks start to lend it will increase the cost of the Debt. If he raised rates then the Banks would lend instead of putting their Money at the Federal Reserve.  It does appear that he is in a box.

Yet, I do think he is getting into dangerous territory with the inflation in Oil, Gold, Copper, Wheat, Rice, Coffee, Soy, Corn.  All of the consumer staples to survive.

It almost seems like he is willing to destroy the Middle Class to keep up Wall Street Bonuses and of course his personal investment account.  Everyone else be dammed.

Login or register to post comments by treemagnet
on Tue, 10/12/2010 – 14:17
#643952

Ben’s reach is beginning to exceed his grasp….and the shorts know it.  Nobody will see “it” coming – not when the bulls decide to be bears and all head out the bottlenecked exit  – most will treat the first day or three like a silly flash crash – and then it’ll resume.   Think what it must take to keep shorts going during times like this?!  You gotta respect that steadfast determination – at least I do.

Login or register to post comments by omi
on Tue, 10/12/2010 – 14:25
#643992

So that’s like saying get ready for 50 points if we breach 1184.50

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