greensleeves

Why This Rally Is Unsustainable

The youngster wrote - "A breakout of 875 on big volume would change things, possibly indicating the BS rally found a way to incite slow money to buy into the rally, perhaps bringing enough buying power in to confirm a sustained bull trend..."

Oh well, it didn't take long to blow this article outof the water, but at least you hedged with the comments above as a fallback. Of course, the bright ones are short the market, while more and more dumb money keeps pushing the market up and up to irrational levels. The financials are up so much that they are still the worst performing group in 2009, after being the worst group in 2008. Nosebleed territory.

The main problem with all this explanation of why the shorts were being forced to cover in March and April which drove up C, BAC and GE, etc. is that the short positions on these stocks went UP during this period. Through April 15 the short levels increased on these names vs the levels at march 13. That would include the days BAC traded above $11 - so that was not net covering. The facts just don't support this whole conspiracy theory. And against who exactly were they conspiring? Oh yeah, the clever ones.

The short positions are still heavily in place, but some are throwing in the towel now, others hoping for a chance late this week.