Short-sellers turned against long-dated Treasurys last month,
while taking pressure off some of the ETF market's biggest and most
widely traded equities funds, a reflection of the broad rally in
stocks that prevailed for most of the first quarter.
While it's possible Treasurys could stage a turnaround, they
were clearly out of favor. The number of shares short in the
iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca:TLT) rose
more than 28 percent last month after rising 4 percent in February,
according to data compiled by IndexUniverse.
TLT's rising short interest, which lifted the percentage of
shorts relative to TLT's outstanding long float to more than 72
percent from 61 percent in February, was consistent with views in
the market that the U.S. economy was perhaps finally on a
definitive healing trajectory.
A clear sign of how stocks were in favor last month could be
seen in the 15 percent drop in the number of shares short of the
SPDR S&P 500 ETF (NYSEArca:SPY). Shorts amounted to a bit more
than a third of SPY's outstanding long float at the end of March,
down from 44 percent in February.
A development related to the rising tide in stock markets was
the 9 percent increase in the number of shares being shorted of the
$68 billion SPDR Gold Shares (NYSEArca:GLD) physical bullion ETF.
Still, the short interest only amounts to 2.5 percent of the huge
ETF's outstanding long float.
A Brief Eurozone Reprieve
Another expression of bullish sentiment was the nearly 14
percent drop in the number of shorts on the CurrencyShares Euro
Trust (NYSEArca:FXE), a long-euro ETF that has been under pressure
as the eurozone's debt crisis careened from country to country.
That decline came after a 14 percent decline in February, and
the percentage of FXE's short interest is now almost 259 percent of
its outstanding long float.
But, as is often the case with short interest data, it can seem
dated rather quickly.
The eurozone's debt problems are back in the news-this time with
Spain and Italy being the focal points of anxiety. That could mean
short interest in FXE is already rising again, just days after the
end of March.
Also, the below-expectations March U.S. jobs report has stoked
talk that perhaps the Federal Reserve may end up launching another
round of bond-buying to keep interest rates low and encouraging
borrowing throughout the economy.
Should more so-called quantitative easing by the Fed come to
pass, it seems a reasonable bet that the short interest in ETFs
like TLT will start to drop sharply.
Finally, a standard caveat here at IndexUniverse:When taking in
short interest data, it's important to remember that data are buggy
and flawed. Due to double-counting issues, it's possible to have
more reported short shares than actually exist in the market.
Still, short interest data are a great way to gauge
sentiment.
| Big Bets |
| Ticker |
Name |
% Float Short |
1 Month % Change |
$Short ($, M) |
| SPY |
SPDR S&P 500 |
36.17 |
-15.30 |
38,212.61 |
| IWM |
iShares Russell 2000 |
116.50 |
0.32 |
17,316.37 |
| QQQ |
PowerShares QQQ |
15.28 |
2.74 |
5,449.72 |
| XLE |
Energy Select SPDR |
41.82 |
6.14 |
3,296.70 |
| XRT |
SPDR S&P Retail |
344.67 |
-4.30 |
2,733.93 |
| TLT |
iShares Barclays 20+ Year Treasury Bond |
72.39 |
28.60 |
2,282.33 |
| DIA |
SPDR Dow Jones Industrial Average Trust |
16.08 |
22.83 |
2,026.46 |
| XLI |
Industrial Select SPDR |
64.58 |
51.27 |
1,802.07 |
| GLD |
SPDR Gold |
2.59 |
9.05 |
1,788.93 |
| XLF |
Financial Select SPDR |
23.93 |
-0.93 |
1,769.49 |
| Really Really Short |
| Ticker |
Name |
% Float Short |
1 Month % Change |
$Short ($, M) |
| XRT |
SPDR S&P Retail |
344.67 |
-4.30 |
2,733.93 |
| FXE |
CurrencyShares Euro |
259.17 |
-13.84 |
498.77 |
| XOP |
SPDR S&P Oil & Gas Exploration &
Production |
151.94 |
0.50 |
1,405.09 |
| DUST |
Direxion Daily Gold Miners Bear 3X |
146.64 |
68.27 |
12.31 |
| RTH |
Market Vectors Retail |
134.15 |
-8.48 |
93.93 |
| VROM |
Global X Auto |
133.59 |
870.74 |
2.89 |
| IWM |
iShares Russell 2000 |
116.50 |
0.32 |
17,316.37 |
| KCE |
SPDR S&P Capital Markets |
111.46 |
5.60 |
41.70 |
| IGEM |
EGShares Industrials GEMS |
100.95 |
3,380.90 |
1.83 |
| DRV |
Direxion Daily Real Estate Bear 3x |
83.38 |
3.73 |
18.14 |
| Squeezable |
| Ticker |
Name |
Short Interest Ratio |
1 Month % Change |
$Short ($, M) |
| BXUB |
Barclays Long B Leveraged S&P 500 TR ETN |
68.30 |
11.97 |
3.45 |
| FGEM |
EGShares Financials GEMS |
25.22 |
4,089.54 |
1.02 |
| RINF |
ProShares 30 Year TIPS/TSY Spread |
19.04 |
-5.01 |
0.78 |
| DRGS |
RBS Global Big Pharma ETN |
14.67 |
58.72 |
0.66 |
| MLPY |
Morgan Stanley Cushing MLP High Income ETN |
9.30 |
0.00 |
1.80 |
| DTUL |
iPath U.S. Treasury 2-Year Bull ETN |
8.26 |
20.42 |
0.34 |
| BXDB |
Barclays Short B Leveraged Inverse S&P 500 TR
ETN |
7.42 |
-1.89 |
0.34 |
| SCLP |
Russell Small Cap Low P/E |
1.49 |
9.15 |
0.10 |
| EVAL |
iShares MSCI Emerging Markets Value |
1.45 |
471.79 |
0.15 |
| EMEY |
iShares MSCI Emerging Markets Energy Sector Capped |
0.78 |
215.76 |
0.08 |
Data is believed to be accurate; however, transient market
data is often subject to subsequent revision and correction by
the exchanges.
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