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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: 10K a day who wrote (80912)	7/27/2001 12:25:18 AM
From: t2	Read Replies (1) \| Respond to of 99985

My point on the shorting of higher dollar stocks increasing more than the low price stocks is really only valid if the market has stayed within a small trading range..month to month. It would not make sense to compare July 2001 to October 2000 using only the simple type of analysis I am using. Since mid-April, I believe the data can be compared because of the Nasdaq's trading range. I am saying that over the last 3 to 4 months, the amount of shorting is actually more than the data suggests..creating more possibility of a rally aided by short covering. For Example: If I was short NTAP and covered at $10 and shorted MSFT at $70. If it was 700 shares of NTAP--it would mean I could only short 100 shares of MSFT---a decline in Nasdaq short interest of 600. ..but the Nasdaq s.i. is increasing month after month (setting records)and very significantly. My assumption is also that the higher price stocks (which are generally higher capitalizeds as well) are seeing more short dollars committed to them because a trader thinks they will ultimately tank like the rest of them....psychology again. That is why this expectation of retesting Nasdaq lows just becomes a huge hurdle and the more likely scenario is a rally at this point in time. JMHO.