by Daily Bell Staff
The Daily Bell
The $1 Trillion Short Underlying Stocks’ Spring … Short interest reaches highest level since 2008 despite gains … Level is contrarian bullish, sets up powerful rally, says BofA … A funny thing has happened in the U.S. stock market, where rather than loosen their grip bears have grown ever-more impassioned. They’ve sent short interest to an eight-year high and above $1 trillion, by one analyst’s math. – Bloomberg
Could the stock market move up hard in these upcoming months? Sometimes contrarian sentiment is an indicator of an unexpected stock market rise. And bearish sentiment is overwhelming at the moment, as you can see from the above Bloomberg excerpt.
So are we looking at a break out? It doesn’t seem likely of course for the reasons we and others have enumerated. Stocks are over-extended by any rational measure.
In fact, equities are almost always extended in our view, but it’s worse now. They’re far more expensive than their earnings give them any right to be and the main motivator of the economy remains excessive monetization.