Get started

Shortinterest

Watching for possible blow-off top, then shorting into JulyAs my followers know, I've been mostly sitting in cash and silver waiting for sanity to return to this market. Y'all bought stocks, and all I bought was popcorn, and it turns out the joke's on me. Here's how big the gap between price and fundamentals has gotten. On June 1, GDPNow reduced its Q2 GDP forecast to -52.8%. This is down over 10% in the last week. As stocks approach all-time highs, the US Congressional Budget Office forecasted a couple days ago that GDP over the next ten years will be about $7.9 trillion lower than previously forecast, and it may take 10 years for employment to return to pre-pandemic levels. In corporate earnings, FactSet notes that the consensus estimate for 2020 SPX earnings per share has declined by 28.0% while $SPX price has decreased by only 6.2% since December 31. We are finally seeing a slowdown in downward estimate revisions, but it remains to be seen whether estimates have actually reached a bottom. The forward 12-month P/E ratio for $SPX of 21.5 is at its highest level since January 2002, even as the risks are rising. We've added over $4 trillion in global corporate debt this year, even as credit rating agencies downgrade existing debt at an unprecedented pace. S&P Global has downgraded 247 issues in the last month and now has 1,287 on its potential downgrade list, surpassing the previous record of 1,028 from April 2009. So what's driving the indexes upward? Three things: unprecedented speculation from zero-commission retail traders, Fed liquidity, and the hope of more stimulus from Congress. I definitely expect the disconnect between price and fundamentals to go away eventually, but the question is when it will happen and what the catalyst will be. The combination of nationwide riots and technical resistance might cause at least a short-term pullback. We're now approaching some important resistance levels in both SPY and Nasdaq. SPY is approaching its top from March, and QQQ is approaching all-time highs. Generally I would expect a technical pullback from these levels and possibly the beginning of a big correction, and it seems like a lot of other traders are thinking along the same lines. We're currently seeing the largest futures net short position in SPY since 9/2015. However, I've decided not to play this particular resistance level, because IMO the massive short interest creates the possibility of shorts getting crushed in a short squeeze. We've also entered a clearance area on the volume profile, which means there's not much resistance until we hit about 322. The 9/2015 high in short interest led to an 8% gain the following month. Only in the four months after that did SPY finally sell off 14%. It also seems possible that we'll get another Congressional stimulus package in the next month, including either another round of stimulus checks, or an infrastructure bill, or both. Personally I am looking for the correction to start in late June or early July. In the last decade or two, June has been the last month of the bull market season, followed by seasonal weakness in July-September. June tends to be an especially strong month for tech stocks, and we're likely to see that pattern repeat this year. Waiting till July gives stimulus optimism and economic reopening optimism the opportunity to play themselves out, perhaps climaxing in a blow-off top as shorts get squeezed up to 322 ahead of the correction. Any parabolic move in SPY would be the signal to start shorting this market as we head into seasonal weakness in the summer.
AMEX:SPY
by ChristopherCarrollSmith
11
Looking at short interest of some US stocks [Crowded Shorts]Hello, I have to look at some details on a FX strategy and it is alot of mental effort, therefore here I am looking at high short interest on stocks that I do not even trade :) Let's look together at the most shorted stocks in the USA. What I think happens in Wall Street is every one copies every one. If a fund misses out on something that every one else has been doing, their clients will be unhappy. If a fund loses money but every one else did too "it was a hard year so it's normal. "We didn't do worse than the competition" and clients stay with them rather than look for another 2/20. I would classify groups of market participants in such a way: - sovereign funds - pensions etc - hedge funds - biggest fund in the world: japan families/housewives (they are all bound to the same laws and fundamentals, they are half the reason why crypto went up I think, the other half being USDT) - noob retail (represented via what robinhood users are doing) - banks but not that much - warren buffet - entire community positions (short interest for example) - twitter, wallstreetbets, other social networks? First, by dollar volume: Looking at the 2 other companies in the top 5 by % shares shorted that I didn't look at already (the 3 were match tdoc mdco): What are all these countertrend warriors? GM has an mcap of 50 billion (mdco is only 6 bil big for example), not in an uptrend, and it is not even in the top 150 most shorted stocks... GE: 100 billion market cap. Not in the top 150! What can more easilly shoot up 200%? A little scooter mcap of 5 billion, or a giant cruiser ship of 100 billion? It's not like they have 0 trading volume... I heard in the media that wall st shorting stocks was a bearish sign but I'd rather not listen to these clowns. Maybe it was far in the past. Maybe in some cases. Not when the whole herd does the same thing. In the top 150 most shorted stocks I look at the ones with the lowest float % shorted: Netflix already done, trending down Charter com already done, going up That's only a few examples, it would require way more study. But looks like the very shorted ones are bad to short, just the herd brainlessly piling up, under 10% seem fine. First impressions are that stocks shorted 5-9% might be a sign something is up, or at least it is not a reason NOT to short. But these > 20% like Tesla are just too much. Shorting > 30% is just asking for huge short squeeze candles and as well as gaps up. And using options won't solve the issue of the price going up and it being a loser just because everyone else is getting margin called. First impression was probably correct. The herd is brainlessly doing what others are doing. Trading as a individual competing with huge companies super computers etc is not that hard really, how obvious can it be to not short crowded shorts? It's really easy, ye 95+% fail, they're all just either irrational, braindead, or don't put in the thousands of hours required. Duh! What? You need over 10,000 hours of learning & experience to get anywhere (or at the bare min 5k for a +1 std dev IQ)? NO WAY! Wow this is so hard. You actually have to spend some time actively getting good like with anything else even video games? Impossible! Every one wants to be a countertrend trader smh. Not just countertrend, ALL TIME HIGH & 25% of all shares sold short countertrend trader. So stupid. There's no excuse. It is stupid.
NASDAQ:TSLAEducation
by MrRenev
7
AMRN - Could Be A MonsterAmarin popped up on my daily scans that are showing bullish momentum following an oversold condition & I do like the look of its daily chart. A gap up on November 12th which has since been held. A Golden Cross occurring around the same time as well. I have a few price targets noted on the chart based on the Fibonacci Extension tool. What really interests me about this stock is the +32% short interest currently out on the stock. 1/3 of the 363 million outstanding shares are currently shorted. If this stock does continue its bullish momentum, then it is only a matter of time before the shorts have to cut loose. This thing can become a monster. I would definitely keep it on a watchlist at the very least.
NASDAQ:AMRNLong
by Chartimistic
Kirkland Lake: Cup & Handle Break Out Back into UptrendKirkland Lake is pulling ahead of its peers in the gold mining sector now that interest in the sector has waned after the late June / early July run up on gold. The same fears and uncertainties are there, but more measured investors are going to single out KL as a sector leader as well as a their management's ability to grow earnings. Short interest continues to be nearly non-existent, so no brave souls are willing to stand in front of this train. The price is bouncing off of the 10 day moving aveage and all short term averages are above long term averages. MACD is moving towards breaking bullish, and the more nervous investors may wish to wait for the histogram to go positive if they want further confirmation of this move. DI+ has just risen over ADX again with ADX just below 30 and changing direction to indicate a resuming trend. Rate of change is showing positive movement over the running average as a good buying signal. RSI is high, but that's to be expected when resuming an uptrend to test new all time highs. I was holding AU at the end of June but my stop got hit first thing in July. Now KL looks to be the leading peer of the sector in the short term with a good buy-in point setting up right now.
KLong
by chuckination
KMX: Cup and Handle Breakout Potential on EarningsI've bough a few cars from KMX over the years, and it's no surprise to me when a company I do business with does well financially on a macro scale. KMX has an excellent model with regional branches and locations handling sales and maintenance and even finance, so they also tap into the financial services marketplace. New sales in the US are slightly down from 2018 to 2019, but not by an alarming margin, but that plays into the hand of used auto sales marketplaces. This is a firm that has had successive growth year over year, and I think they'll do it again. Volume picked back up, and I'm confident that this cup and handle pattern is setting up well. Traders attempting to short at the end of last week finally threw in the towel leaving almost no one shorting this stock right now. The technicals show KMX breaking out of a horizontal channel after a period of consolidation in May. To their credit, they lost no value for the month of April and would have been a good long term hold the entire if you bought back in late January or early February. They just excceeded and held their September 2018 highest high for three days through a broader short-term consolidation of the US stock market after a record week last week, so this all looks good to me. All short term moving averages are above longer term averages, and the recent consolidation in May has given up some pressure on price strength giving the stock more room to breath. MACD and ADX show the current uptrend picking back up, and the quarterly rate of change indicator is still rising. All signs point to yes on this one.
NYSE:KMXLong
by chuckination
TNET: Bullish BreakoutI've been watching TNET since their massive 1-day spike of 23% back in February, and they've been flat in a horizontal channel since. That was a strong clue that I needed to be patient and wait out for a break out on them. Well, it's happening now and the prices are breaking out of that channel in an upward trajectory. TNET starting bubbling last week the market rally, and it appears to be continuing ahead. They were also completely untouched from any bad news in May, and they're making solid profits from a fundamental perspective. For technicals, everything is bullish. Moving averages have a strong 50-day over the 200-day, and the 50-day rose to put the squeeze on the 20-day with the 20-day finally diverging upward. MACD continues positive but has started to accelerate upward on the histogram. ADX shows a trend in place with DI- crossing ADX downward last week and DI+ strongly diverging upward above ADX showing the the trend is good and is only beginning to pickup steam. Relative price strength is high but not yet overbought. Rate of change is also breaking upward and money flows are starting to move into the security. There's no short squeeze happening and it seems that this stock scares the pants of the bears. I put into this in the morning on Tues adjusting my industrial holdings, and their growth resembles a tech stock more than a industrial which makes sense with their cloud and online offering of HR services.
NYSE:TNETLong
by chuckination
$10 Move tmw on $TSLA. Bottom of channel at sup w/$400 PT ReitTesla has been in a strong downtrend down 30% this year. Short Interest is near an all time high. Showing bottoming candles and is at the bottom of the channel near a strong support. RSI is curled up and several bullish divergences on the indicators. Baird Analyst Ben Kallo Reiterated his $400 price target on Tesla's Acquisition on Maxwell Technologies that closed today. Technology acquired will drastically improve battery technology, cost, range, etc. and make it difficult for any company to catch them in the EV race. a 20% savings on a $5,000 battery is $1,000 per car. At 400- 500 Thousand cars a year that is a savings of $400-500M per year!
NASDAQ:TSLALong
by BrandonOsborne
7
Walt Disney's New Streaming Service: A Magical Disruption?I picked up some shared of Walt Disney last week when I got tired of waiting for Netflix to rebound, and I suspected that the announcement of the Disney+ streaming service had the potential to rally their stock and possibly sink the competition temporarily. I had no idea how right I was, but I made sure to double my holding that morning and it immediately paid off by the end of Friday! I strongly recommend getting on this as this appears to be an opportunity for DIS to look like NFLX did earlier this year riding high on expectations. Ride it as long as you can, and beware the Greater Fool Theory. Quite literally all possible technical indicators are looking great, and the only downside is that the RSI and short interest appear to be oversold. However, the insanely huge volume spike on Friday is the strongest indicator that this rally trend is just starting to get onto the highway.
NYSE:DISLong
by chuckination
KMX: Another Earnings Suprise Crossing into a RallyI'm a little late on publishing this idea, but I'm not late on holding on here. Carmax is currently getting two monthly payments from our household, so I know this company is generating a cashflow, and so does everybody else after their solid 11% earnings surprise about two weeks ago. I've been holding and watching and waiting to publish before seeing a trend confirmed, and I have now. KMX is having the 20 day moving average cross over the 200 day in a test alongside a volatile background market beta, but it's continued to chug along and keep my portfolio afloat. MACD is positive and the histogram is continuing to break positive with plenty of room to go in this current trend. ADX and DM+ are pulling along strongly upward together with only the first hint of this trend being challenged, and I'm not even phased by that given the broader market right now. RSI is a little high at about 77, so I do expect the next week to be a test for a longer term rally, but the momentum of the averages alongside very strong company fundamentals means that their price got massacred in late 2018 from everyone else and the street is about to see if they can go higher. There are some headwinds in the form of declining volume, but that's expect after so many big money trading desks have scaled up their holdings last month. Declining short interest when the price is being tested is the only signal I need to keep holding on here because even the bears are scared to bet against this current earnings rally. There's plenty of steam left for you to get on the bandwagon during this current price resistance testing.
NYSE:KMXLong
by chuckination
COST: Welcome to CostCo Earnings, I love you!This one was truly a no-brainer for me the other day, but I was waiting to publish on the earnings news. COST is up 5% is afterhours with a potential blowout day tomorrow on market open. I also believe that the financial media will latch onto this good news from them with a fervor in hopes of pushing back a little on this current bear market sell off index wide. I do believe that COST has a possible long run up, but I'll be setting my stops tight until I see upward action for longer than a week. I bought into this a few days ago anticipating that the post-earnings action would be an upward reversion towards a long term mean because even though COST did rise slightly in January, they didn't experience a stellar blowout like some others and I felt that they were due with their holiday shopping earnings report the same as TGT and KSS. I do have profits from TGT and stayed out of KSS because of higher volatility, and it appears the cautious value investor in me made the right decision in this choppy market. MACD has been floating mildly flatly with only a minor dip today that bounced back of the signal line in after hours activity. The bullish breakout in January wasn't strong enough to pull up the ADX trend strength index above a 20 yet, and I suspected that the +DI would bounce off the -DI as a support in the couple of days leading up into earnings to have a sharp breakout above the 50 and 200 day moving averages as resistance is being tested and the bulls will win have won out on earnings in pre-market. RSI appears to be testing a resistance near 50 as well, but momentum is beginning to look positive and may remain so if the breakout settles into a strong trend channel upward. Money flow is positive, and it looks like the few bears that bet on a bad earnings call are going to get squeezed out fairly quickly for some easy bull trap bait. Volume began to rise right before the call, and will break out hard tomorrow on market open, too. Welcome to CostCo, I love you!
NASDAQ:COSTLong
by chuckination