Stocks need fuel to rise. Be it plain-vanilla inflows, be it rotation from other asset classes like bonds, be it corporate buybacks, or be it squeezed shorts. The latter has played a big role particularly since the October 15th bottom … Continued
October 15th bottom in stocks forces shorts to cover in many sectors IWM expends lots of short-covering fuel to approach crucial resistance Nasdaq, NYSE short interest at multi-year highs, can bulls force squeeze? Since stocks bottomed on October 15th, naysayers … Continued
10-year notes yielding lower vs when Nov’s blockbuster jobs report came out Large speculators’ net shorts in 10-year-note futures at four-plus-year high Bond vigilantes not buying hopes and prayers of escape-velocity backers Treasury bonds continue to catch a bid. A … Continued
Laggards since March, small-caps continue to fall behind large-caps With increasing signs of distribution, RUT, IWM face technical hurdles More pressure ahead if/when non-commercials start adding to net shorts Since end-September, large speculators have drastically cut back on their net … Continued
Financials have been acting better of late. Since November 20 when XLF, the financials ETF, successfully tested its September 19th high, there are bids underneath particularly large-cap financials. The stocks responded very well to the jobs report last Friday. This … Continued
Ahead of ECB meeting, euro misery continues Draghi under pressure to deliver news of more stimulus Large speculators look tentative and sitting on massive net shorts When early October, FXE, the euro ETF, was unable to hold on to 126-127, … Continued
Big tailwind for stocks has come from grossly oversold technical conditions Several indicators are lagging – failing to confirm recovery highs in major U.S. indices Some signs stocks want to rest; could be important as SPX sits right underneath major … Continued
Shorts continued to raise bets, with short interest at multi-year highs October 15th reversal followed by sharp advance probably caused short-covering With QE gone and broken trendline resistance on S&P 500 intact, shorts could get active again Bulls probably took … Continued
Shorts added to already-elevated positions on time to take advantage of latest decline in equities Indices in gross oversold conditions, giving bulls opportunity to try to squeeze shorts If shorts resist these pressures well, that signals rockier time ahead for … Continued
VIX action yesterday constructive for equity bulls Medium- to long-term, equities have much more to go on the downside Near-term picture beginning to change, as beaten-down junk bonds and small-caps attract bids The morning gap-down in U.S. equities yesterday was … Continued