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Short Interest Hikes Again


Am I throwing good money after bad or not?


NYSE short interest for the period between mid-July and mid-August rose 2.66%, breaking a string of two declines. NASDAQ short interest also rose (+1.25%), making it five of the last six months in which Boo's crew pressed their bets.

The graph I've been using appears below. It uses January 2003 as an index year (for no reason than that was a complete year bull market and the first year where I collected data. I'm not certain the graph is anything more than informational, but I think it is worth pointing out the pattern of the indexed NADSAQ Comp (in dark blue) after each time it was eclipsed by the indexed value of the NASDAQ short interest (light blue).

In contrast to short interest on the entire NASDAQ universe, short interest on the 157 stocks in the NASDAQ Biotech Index (NBI) was essentially flat (+0.07%). This has something to do with five companies dropping off the NBI in the last month as average short interest on NBI stock rose 2.56%. Short interest of the NBI as a percentage of overall NASDAQ short interest is now at 11.83%, down slightly from last month's 11.97%. The increases in biotech short interest came in the face of an overall up move in the NBI of 1.18%.

Beginning in May, I started tracking short interest in biotechnology stocks that ended up on the Regulation SHO Category A and B lists (read more about this here). These stocks were selected because they were members of the NASDAQ Biotech Index (NBI) at the time the SHO Part Two rule was initiated. Short interest in these stocks increased in the last measurement period by 5.66%, outpacing the overall increase in biotech short interest.

Short interest in the IBB, the iShare ETF for the NASDAQ Biotech Index (NBI), declined 3.59% to 8.59M shares last month. In July, short interest in the IBB declined 8.71%. The BBH, a HOLDr ETF approximating the AMEX Biotech Index, saw short interest drop 16.19%, the fifth straight monthly drop.

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No positions in stocks mentioned.

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