Short-Covering Rally Data Points

On March 9^th I put together a portfolio of ten highly liquid stocks and ETFs that had extreme short interest positions. I posted about this portfolio the next morning in Short-Covering Driving Today’s Gains.

I thought this would be a good time to share the performance of these heavily shorted stocks and ETFs during the course of the past 7 ½ weeks. I have the graphics below (click to enlarge) from Finviz.com to show how the portfolio has performed.

As a bond ETF, Barclay's 20+ Year Treasury (TLT) probably should not be in the group, but since I included it in the original portfolio, I’m leaving it in here for now. For what it’s worth, removing TLT from the portfolio pushes the total return up to 116.60%. Clearly, a large part of the recent gains have come from short covering the likes of Deutsche Bank (DB), MGM Mirage (MGM), and shopping center REITs Macerich (MAC) and CBL & Associates (CBL).

Comments

[Baboon:]

I guess this is bearish sign.

May 03 09:57 AM

[jr007:]

The life of a short trader is not easy.

May 03 11:10 AM

[Market Sniper:]

Only consolation in a sharp bear market rally is that for the short side trader, prices tend to drop faster than they rise. Trade what you see not what you think. Only price pays.

May 03 07:55 PM

[Freya:]

good luck to all of you.

Be nimble but do not anticipate.

May 04 06:26 AM