Typical Short Squeeze

The market since July 1st has had a lot of changes in character, one of the biggest has been its inability to maintain a short squeeze. There have been a number of squeezes (as defined by our Most Shorted Index - MSI), but largely they have been a short term intraday event rather than past squeezes just several months ago that could sustain over days and even a week.

In any case, for those who don't know what a short squeeze looks like, here's a good example...

 A parabolic move and a short squeeze look similar, however a short squeeze usually has more of a diagonal trend whereas parabolic moves tend to be more vertical. In a short squeeze you can usually draw a trendline like the one above and you'll notice there are few to no corrections/pullbacks.

 The MSI (yellow) vs the SPY (green) this morning with an initial squeeze on the open and another around 10:15.

However the MSI is trailing the SPY longer term and shorter term the TICK Index looks like this is going to run out of steam.

Note this morning's TICK Index channel and the inability of TICK to make it to the top channel as it starts to fall out of the bottom channel.

Intraday 1 min charts are still in great shape, but there's still work to do on 5 min charts and the SPY in general.