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Friday, July 25, 2008

Short Interest

Leaning on stocks? Check out the shares short on June 30, and then on July 15.

BAC went from 101 million to 134 million. 33 million shares shorted in two weeks.

Wachovia went from 235 million to 260 million. 25 million shares shorted in two weeks.

Lehman went from 70 million to 85 million. 15 million shares shorted in two weeks.

Those are shares that were "reported." Forget the volume that these stocks trade. 90% is just algorithm day-trading. Unless you believe that half of all the shareholders in BAC flushed out of their stock the last few weeks, (2.2 billion shares traded) and that the entire shareholder base of Wachovia traded hands in just 14 trading days.

That's why you get these 80% moves in these stocks.

Shorts have an agenda, and so do the bulls.

They just don't call their program "the Hammer" and let the CFTC throw charges at you!

Remember how Lehman Brothers traded on July 14th? The stock "hammer" came in at the close and knocked the stock down a buck and change in the closing minutes. You had 500 million shares trading hands in the two days before and after the "hammer" hit the close. The stock was almost cut in half on the shorting, and then moved almost 70% in the days after when the covering started.

That's the market we are in. Big positions, with big agendas!

Forget long term-you just need a day or two to have your move.

And stock ideas are like the "manna" in the wilderness.

It's not any good after a couple of days.

Be quick to buy, and quick to sell, because the moves have to be fast.

Especially if your playing "fast and loose" with the rules!

Because you need to be in and out of your trade and then have your money moved to Liechtenstein!

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