Unfortunately for our Short Brethren there isn't enough sellers for them to cover their short position without moving the price 3-5% in 5 minutes. Therein lies the dilemma.
How do 52 Million or so Shorts exit without leaving a trace?
What if CLF announces a new CEO? What if CLF announces a positive update on their Chromite geological study/permitting? What if the 10% CLF owns of the huge Graphite mine is Canada bears fruit in the 4th quarter? What if the Fed delays tapering until 2014? What if China continues to grow its infrustructure spending? What if the European and American economies continue to growth steadily through the next year? What about impending explosive earnings on October 19th? What if IO pricing holds over $125 for the next 2-3 quarters, including over $130 through this quarter?
What happens when institutional Shorts like Credit Suisse issue a negative report on CLF and the marketplace ignores them because we all now have access to the same information as the misleding shorts and we know they are lying? This ain't 1998 Credit Suisse. I can access financial statements online and listen to a CC, find daily IO spot prices and I can learn about China's economy as quickly as I can make an omelet in the morning now.
2.2 million shares traded on a daily basis by 11:45am isn't enough to get out without a trace. September and October are going to be interesting.
Agreed, june -- the gangs of CLF shorters are skating on thin ice, as we say here in Canada.
Unless the market at large blows this Syria affair out of proportion, I wouldn't be surprised to see CLF back around $25.00 by next Friday.
Shorters will inevitably become buyers in fairly short order (pardon the pun)...assuming they are forced to start buying en masse, we should see book value share prices again by the end of October, possibly sooner.
My CLF shares are on sale for $50.00...there will be buyers at that price again eventually...
Stocks did quite well during the entire second Gulf War. A Syrian strike as surface missiles won't impact world markets unless WW3 breaks out. We've (Americans and the World) been through these dictators before and no one believes Syria will turn into Iraq. The volume point was about CLF and not the general market and not about long positions.
Im discussing Short positions and the ability to make profit on them. Short positions profit when there is a high volume of sellers who believe a stock is going down indicated by selling. Since the volume is down and the short position only dropped 10% in the last month is not a belief by the Short holders that CLF is going to $10, but a reality of low volume that Long positions are not being liquidated at the rate necessary to support a Short position, especially considering the Macroeconomic environment.