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ETF Short Selling

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I love the smell of shorts in the morning!

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Toddo - Re: your Mailbag of 8:33 am yesterday:

Short selling in the QQQQ and the DIA is relatively light, while short selling in the SPY is more substantial (that's bullish, in our opinion.)

It's been my observation that short selling in the ETFs do not necessarily match short activity in overall common stocks, however there were a lot of "insurance" bets in the 2003 advance.

The market has been unable to make further highs following the apparent capitulation of the QQQQ and DIA shorts at the end of 2004. The idea that use of short selling as a hedge is not an expression of sentiment doesn't wash. True, a hedged position is less volatile than naked short selling, but nobody hedges their long positions if they think the market is a bull.

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No positions in stocks mentioned.

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