Trying To Figure Out When Shorts Will Start Covering In Mass
There has been very little short covering if any during this entire run up from the most recent bottom which is very unusual to say the least. Not sure if shorts are in shock, disbelief or are just so sure of their position that they won't cover at any price (not really a smart way to play the market). Therefore, at the very least I say we need to make new highs before we start to see any significant short covering. Nothing like a fresh new all time high to get the shorts attention. However, one new high probably still doesn't get the attention of many of the shorts. We probably need to sting a few new highs together and then we will start to see trickles of short covering. Once the shorts start to see other shorts breaking rank the trickle will probably speed up to a few pockets of panic short covering. We are probably 30 to 35 points above the current top before all of this starts to happen. Then we probably need a few 20 to 30 point days of constant covering to finish off the top. If you add up all of these numbers together the new top is probably 70 to 90 points from the old top which brings us into the 1750+ range for the new top. There you have it.
More rhetoric once again-not much in facts-Per June 14th data-NYSE short interest has only increased by 3% from its record low set on May 31st. There won't be much short covering from here with near record low short interest.