NYSE Short Interest

Here are the latest short interest figures from the NYSE. Mid September Short Interest hit the highest level sine March of 2009, which was also the market bottom and the start of a 2+ year bear market rally. The latest reading saw Short Interest drop over 5% in a flat market more or less. The S&P last week put in its strongest rally in over 2 years, it will be interesting to see the October 15th short interest levels. Note the low volume of the rally, this is a classic short squeeze environment and the lack of pullback is classic short squeeze price action. This was the point of the market making a new low before heading off on what I said would be the biggest rally we have seen in awhile, although I'm even surprised by the intensity of the last 9 days.  If there's one lesson I've learned the hard way, it's that when the market starts acting like this, there's a pendulum effect and as irrational as it moves in one direction, watch out, it will do the same in the other direction-that's the kind of volatility of a wounded, dying wild animal and usually portends a big change.