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Where Have All the Shorts Gone?

OK folks, just a quick note this morning.  The July jobs number was released and once again - euphoria.  There is celebration that 'only' 247,000 jobs were lost.  Yes, I know that is is a lower number than June, than May, than April, etc.  Is this proof that the economy is recovering, or is it simply the result of fewer jobs to be cut?  Let's face it, no one is finding work and companies are in their second and third round of job cuts.  One piece of data being hailed as a positive is an increase in the average hourly work week.  One note of caution there, however, is that when employees are laid off, those that remain are left to pick up the slack.  So the company is still saving overhead by cutting employees and by leaning harder on those that remain.

With all of that said, once the numbers came out, the futures got their quick, obligatory pop, but the spike was much milder than in recent past.  Why?  Short sellers have stepped away from the table here.  There are very few shorts to squeeze.  After the announcement, I expected the Dow futures to be up 150 - 200 points, yet all they could muster was +60.  As of this writing, they have managed to push up to +82.  With no shorts to squeeze, what are market makers and specialists to do?  They are now licking their chops to run this market lower.  All of the players are crowded to the bullish side of the boat.  Get ready folks, we are going lower.  Market makers and specialists have to make a living too.  That is how the markets work.