Short-sellers turned up the heat on long-dated U.S. Treasurys
last month, when prices of equities themselves pulled back amid
concern about the eurozone debt crisis and economic data that was
looking weaker than it had earlier in the year.
The fact that short interest on the iShares Barclays 20+ Year
Treasury Bond Fund (NYSEArca:TLT) jumped more than 17 percent last
month suggests that some investors might be looking past weak
stocks and focusing instead on how a reacceleration of growth might
put upward pressure on long-term bond yields. In September, shorts
on TLT dipped 11.5 percent, according to data compiled by
IndexUniverse.
The Federal Reserve, through various policy initiatives, has
vowed to keep official interest rates and long-term bond yields low
to help encourage borrowing, and thus, economic activity. But
concern continues to course through the bond market that all the
central bank's easy-money policies are creating big risks of
inflationary pressure. The jump in TLT shorts tells that tale to
some extent.
Among other noteworthy changes in short interest was the nearly
40 percent jump in the number of shares of the PowerShares QQQ
Trust (NasdaqGM:QQQ), after a 2.5 percent increase in
September.
Additionally, short interest in the CurrencyShares Euro ETF
(NYSEArca:FXE) rose 5 percent last month, after rising more than
15.5 percent in September.
That's consistent with some of the renewed concern about the
ability of southern European countries like Greece and Spain being
able to continue to work their ways out of serious debt at a time
when austerity measures are carrying the day.
Separately, the shares short in the SPDR Retail ETF
(NYSEArca:XRT), the poster child of excessive shorting in the ETF
market, dropped almost 18 percent in October, after declining 14
percent in September.
XRT's short interest relative to the outstanding long float-at
just over 250 percent at the end of last month-has been steadily,
if unevenly, moving lower in the past year. That number was as high
as 600 percent in the summer of 2011.
Caveats
It's important to remember that short interest data are buggy,
and flawed, as IndexUniverse Director of Research Dave Nadig likes
to say.
For example, because of double-counting issues, it's possible to
have more reported short shares than actually exist in the
market.
That said, looking at the short data is still a decent way to
gauge market sentiment.
| Big Bets |
| Ticker |
Name |
% Float Short |
1 Month % Change |
$Short ($, M) |
| SPY |
SPDR S&P 500 |
27.34 |
2.99 |
29,811.29 |
| IWM |
iShares Russell 2000 |
75.27 |
3.01 |
12,544.19 |
| QQQ |
PowerShares QQQ |
12.62 |
39.63 |
3,870.83 |
| GLD |
SPDR Gold |
4.23 |
3.01 |
3,124.51 |
| XLE |
Energy Select SPDR |
41.33 |
2.30 |
2,991.85 |
| EEM |
iShares MSCI Emerging Markets |
6.07 |
0.80 |
2,312.87 |
| TLT |
iShares Barclays 20+ Year Treasury Bond |
64.27 |
17.33 |
1,966.37 |
| IYR |
iShares Dow Jones U.S. Real Estate |
33.56 |
-0.74 |
1,704.19 |
| XRT |
SPDR S&P Retail |
256.25 |
-17.83 |
1,548.76 |
| DIA |
SPDR Dow Jones Industrial Average Trust |
14.28 |
13.96 |
1,473.03 |
| Really Really Short |
| Ticker |
Name |
% Float Short |
1 Month % Change |
$Short ($, M) |
| XRT |
SPDR S&P Retail |
256.25 |
-17.83 |
1,548.76 |
| RTH |
Market Vectors Retail |
252.10 |
3.45 |
41.79 |
| FXE |
CurrencyShares Euro |
220.95 |
5.06 |
582.94 |
| XOP |
SPDR S&P Oil & Gas Exploration &
Production |
186.89 |
13.46 |
1,452.12 |
| FXY |
CurrencyShares Japanese Yen Trust |
182.14 |
-1.04 |
235.12 |
| RKH |
Market Vectors Bank and Brokerage |
150.97 |
-0.58 |
34.64 |
| FDTS |
First Trust Developed Markets ex-US Small Cap
AlphaDEX |
102.11 |
4,528.92 |
1.51 |
| KRE |
SPDR S&P Regional Banking |
80.88 |
54.73 |
975.22 |
| IWM |
iShares Russell 2000 |
75.27 |
3.01 |
12,544.19 |
| VZZB |
iPath Long Enhanced S&P 500 VIX Mid-Term Futures ETN
(II) |
70.46 |
-1.84 |
0.56 |
| Squeezable |
| Ticker |
Name |
Short Interest Ratio |
1 Month % Change |
$Short ($, M) |
| RKH |
Market Vectors Bank and Brokerage |
150.97 |
-0.58 |
34.64 |
| FDTS |
First Trust Developed Markets ex-US Small Cap
AlphaDEX |
102.11 |
4,528.92 |
1.51 |
| KCE |
SPDR S&P Capital Markets |
32.45 |
-4.22 |
5.86 |
| DRGS |
RBS Global Big Pharma ETN |
11.61 |
-1.90 |
0.55 |
| JJU |
iPath Dow Jones-UBS Aluminum Total Return ETN |
11.24 |
-1.81 |
0.36 |
| BUNT |
PowerShares DB 3X German Bund Futures ETN |
6.87 |
115.91 |
2.92 |
| UINF |
ProShares UltraPro 10 Year TIPS/TSY Spread |
6.64 |
-2.92 |
0.27 |
| TAGS |
Teucrium Agricultural |
2.24 |
14.61 |
0.06 |
| BNPC |
STREAM S&P Dynamic Roll Global Commodities |
1.44 |
5.89 |
0.24 |
| TRSY |
PIMCO Broad U.S. Treasury |
0.47 |
140.69 |
0.09 |
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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