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URL: http://www.learntotradefutures.com/dcforum/DCForumID25/300.html#5 Message Information: ---------------------------------------------------- Forum: Daily Commentary 2006 Thread Number: 300 Reply Number: 5 (0 = original message) Thread Subject: Short Selling Record Posted by Duncan Posted on 11:21:32, 06/22/2006 Posted Message: ---------------------------------------------------- http://news.goldseek.com/RickAckerman/1150988400.php \ \ \ \ \ http://bigpicture.typepad.com/comments/ Short Selling Surges to Record in Markets | Psychology/Sentiment | Technical Analysis | Trading The WSJ reports: "Short-selling activity jumped to a record at the New York Stock Exchange during a reporting period in which U.S. stocks pulled back broadly amid fears of higher interest rates and weakness in overseas financial markets. For the month ended June 15, the number of short-selling positions not closed out -- known as short interest -- rose 5.5% at the Big Board to 9,087,309,158 from 8,613,110,732 in mid-May. Marketwide, the short ratio, or the number of shares that investors have sold short divided by average daily volume, fell to 4.9 from 5.0." High short selling can be a contrary indicator, depending upon who does it. When its the general public, it is typically a good fear indicator. At extremes, its a buy signal. Rallies can often get started with short covering, and this can lead to fierce price spikes as shorts scramble to cover (like last Thursday's 200 pointer). However, short-selling by "smart money" -- e.g., NYSE specialists, market makers, etc. -- is often a sell signal. When too much of the public clamors fopr stocks regardless of price, the professional selling can often mark a top. These often come form the Commitment of Trader's reports (more on the CoT soon). The short selling reported last week is the total short position of the exchange -- that sets the stage for a modest advance. As these shorts cover, its fuel for the market to grind higher. > Source: Short Selling Surges to Record On the Big Board Softness in Markets Abroad And Interest-Rate Concerns Drive Dimmer View of Stocks PETER A. MCKAY WSJ, June 22, 2006 http://online.wsj.com/article/SB115093390630986973.html Thursday, June 22, 2006 | 05:48 AM | Permalink | Comments (0) | TrackBack (0) Question for the Commentariat in Weblogs Here's a new question for you: I am hugely grateful for the terrific commentary 98% of you post. For the most part, I leave the comments pretty open ended. The Commentariat here are intelligent, insightful, enormously helpful. Wired magazine calls this process "Crowdsourcing." Then, there's that other 2%. I almost deleted a comment personally disrespectful to me -- but I figured I'd let it slide. Then I pulled up this person's comment history: a grand total of 8 comments over 3 months, most of which were smarmy, unhelpful, borderline troll behavior -- and worst of all, quite frequently wrong: • I think you're wrong on the FIRST QUARTER, Barry. It's going to come in hot! (2/21/06) • The chart says buy the S&P 500. It is due to catch up (3/21/06) • CORE inflation is benign. (5/19/06) So I deleted the comment. Disrespect me in my house, you're out on your ass. Here is the Crowdsourcing question: What is the preference for handling these issues? • Leave the comment intact; The market place will ignore bad ideas/unhelpful posters; • Respond directly in the comment; (see the last comment here as an example); • Edit out the offensive part; (Nanny blog lives!) • Delete the comment; (with extreme prejudice) • Delete dumb comments and ban the offender! (Long live the Benevolent Dictator) I'm not sure the best way to go, but I am very curious about the group dynamic. I've been spending alot of time dealing with comment/trackback spam, and ignoring some of the other issues with comments -- but I want to clean them up, keep the comment function useful, and also stay vigilant against trolls. What say ye? Wednesday, June 21, 2006 | 11:12 PM | Permalink | Comments (34) | TrackBack (0) \ \ \ \ \ \ http://www.theherald.co.uk/business/64574.html \ \ \ \ \ http://www.ft.com/home/us \ \ \ \ Housing boom is biggest on record Economist: Increase in U.S. prices possibly psychological E-mail | Print | | Disable live quotes By Amy Hoak, MarketWatch Last Update: 2:29 PM ET Jun 19, 2006 (This update clarifies that the U.S. housing boom is the biggest on record.) CHICAGO (MarketWatch) -- The recent housing boom is the biggest the United States has ever recorded, but its underlying reasons may have been psychological, economist Robert J. Shiller said on Friday. New data also suggest the market might be at the end of a cycle, he added. The only time since record-keeping began in 1890 that compares to the recent residential real-estate market is just after World War II, the Yale University professor said during a presentation on U.S. home prices, held at Standard & Poor's in New York and broadcast to journalists on the Web. "After World War II, the soldiers came back and they wanted houses and started the baby boom. And when you had babies, you wanted houses with at least two bedrooms -- and that wasn't so common back then. They went on a buying spree and it pushed home prices up," he said. The recent boom, however, doesn't have the same fundamental variables causing prices to soar, he said, adding that variation in such things as building costs, population and interest rates doesn't adequately explain the reason for the housing boom. "I don't see why home prices should be shooting up that strongly," Shiller said, adding that speculation may have played a role. "It's a sign of concern." Shiller was co-author of "Irrational Exuberance," a book that chronicled the stock-market bubble of the late 1990s. He also co-developed the S&P/Case Shiller Home Price Indices, designed to measure the average change in U.S. home prices. The indexes are based on 10 cities -- Boston, Miami, New York, San Diego, San Francisco, Washington, D.C., Chicago, Denver, Las Vegas and Los Angeles -- and are now the basis of new futures and options trading at the Chicago Mercantile Exchange. Within that index, Shiller has noticed a short-term trend of cooling home prices that could signal an end to the cycle of steep appreciation increases. Investing in the index could help homeowners hedge against price fluctuations in their homes, he said. Shiller disclosed that he is not allowed to invest in home-price index futures. During a question-and-answer session, he said that the stabilization of home prices could also have some effect on consumers' means of gaining equity. Low interest rates inspired people to refinance their homes, and the increasing value of their houses allowed them to pad their pockets with spending money; consumers will now have to turn to other means for financing, including credit, he said. In the future, insurance companies may offer policies to shield consumers from lowering home prices, thanks to the futures now available, according to David Blitzer, managing director and chairman of the Index Committee at Standard & Poor's, who also participated in the presentation. He identified the housing market as a continued stable investment. "If you want volatility, go to the stock market," he said. "If you have any doubts of that, take a look at it over the past six weeks." \ \ \ \

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