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Strategies & Market Trends : Ask DrBob

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To: Drbob512 who started this subject7/20/2001 4:18:43 PM
From: Louis V. Lambrecht   of 100058
 
Short interest on the Nyse hits record five months in a row.
Bullish or bearish?
That is the problem with contrarian indicator.
If you consider that the crowd is right in the trend but wrong at both sides, the problem will be to determine if we indeed are at the end of a trend.

schaeffersresearch.com

If you have read our market commentaries, we often mention short interest as an indication of the level of skepticism in the market. Short interest reflects the number of shares that have yet to be repurchased to give back to lenders. In general, the higher the short interest, the more people are expecting a downturn. Keep in mind that these levels must be considered in the context of the market. We view high levels of short interest on a strong issue as bullish, but high short interest on a declining issue is expected and most definitely not a signal to buck the trend.
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