Useful chart from Bloomberg showing that short sales on the NYSE have touched an 18-year low. It is one of those paradoxical things during a declining market, of course. Now, much like with the Pelosi graph it is worth pointing out that is in absolute rather than percentage terms, but in this case using absolute numbers understates the decline.
The graph is accompanied by a useful article on what short-sellers are up to right now. Most sound somewhat cautious, expecting some sort of bounce.
U.S. stocks trade at an average 15.23 times earnings after falling as low as 15.20 in November, the cheapest since 1990, based on an analysis by Robert Shiller, the Yale University professor whose 2000 book “Irrational Exuberance” predicted the market’s collapse. His analysis uses a decade of earnings to smooth out short-term fluctuations.
“I would be very cautious about being short this market right now,” said Dan Veru, who manages about $2.4 billion and can bet on gains and declines in equities as chief investment officer of Palisade Capital Management LLC in Fort Lee, New Jersey. “It’s very dicey.”