NYSE Short Interest Rises to Another Record High

While it looks awfully similar to oil, the chart below shows short interest on the NYSE since 1990.  After the close yesterday afternoon, the NYSE released its mid-month short interest report for June.  Since the end of May, short interest on the NYSE increased by over 7%, making this the third time this year that short interest increased by over 5%. 

While overall short interest is typically considered a contrary indicator, over the last several years, the increased role of hedge funds and long/short mutual funds has led some to place less emphasis on this indicator.  That being said, eventually shorts have to be covered, and therefore higher levels of short interest should provide some degree of a downside cushion.

click to enlarge

Comments

[theinvestingspeculator]

Most people take short interest as a time to buy. It might be good for a trade but the fundemental are going to push the market down. Housing still has big problems and is getting worst. The history of the housing market can give us clues to when things will improve. I will show you hear @
theinvestingspeculator...

[bill d]

Your comment confuses me almost as much as Shiller does.
I think Shiller confuses prices with value. Speculation and very shoddy loans caused prices to go up - REAL values technically did not change. Prices will go back to where they belong
Owner occupied is never done as an investment per se. Everyone has to have a place to live (occupy). Like most everything, prices go up - so the intrinsic value increases even though as a house gets older it certainly doesn't get "better". Your house payment "rent" allows you at some point, normally, to recoup all or part of that "investment"... I have never lost money on a house and had to sell 3 as a result of the military moving me around. It was cheaper to buy a house than to find one to rent and if I left without a "profit" I considered the payments as rent plus being able to deduct interest on the loan. If I made a "profit" then I considered it living rent free plus a return on my "investment"...
If you consider him having a better grasp of the housing situation then there must be a misunderstanding or a typo in the statement:
"Robert Shiller predicts that home prices will drop more than 10% in the coming years."
Wow - when can we expect that ? You could make that statement any time now and in the past and in the future and you would always be correct eventually as housing, like the market and the economy is cyclical but in the long run they increase in Price and I guess in Value. The fact that housing has declined more than 40 % quite recently (and not done yet) I suppose that validates his prediction ???
(Have to remove my firmly planted tongue from my cheek now).
I predict oil will go up (and down) next week.
Housing will take a little longer.
Robert Shiller predicts that home prices will drop more than 10% in the coming years.