Market usually turns when it is least expected. When everyone was thinking market could turn ugly in the late August when S&P-500 hang dearly above the important 1040 support level, it followed though with conviction to the upside on Sept 1st.
Since September 1st, Nasdaq has run up 12%, followed by Russell 2000 11%, SP-500 and NYSE 9%; Dow Jones 8%. Nasdaq 100 is the strongest running up 15% with fund managers continue to pump money into the most liquid names. All major indices close above their corresponding Aug high, bolting the market to a solid intermediate uptrend.
Top notched growth stocks are running hot with big cap growth leaders, such as AAPL, BIDU, PCLN making all time highs. Leadership are broadening with participation from various industry group such as Leisure, retail, computer software, computer hardware, internet, telecom, construction machinery, fertilizer. Semi conductors are playing a catch up game while the financials continue to labor. The negative divergence from the financials will eventually come back to haunt the market.
In Livermore's book, he often talks about Wall Street Suckers. One suckers' play is to short the high flyers in a bull market. In finance discussion board, I see people start to short NFLX, AMZN etc. If you do, you better think twice. The following stocks, which I own, have very big short interest. Those who short these are the ones being screwed to provide the fume to stocks' furious price gains when the trend turns solidly higher. Don't short the high fliers, stupid!
Short interest:
EBIX: 40% (11 million out of 27 million float)
NFLX: 30% (12.5 million out of 40.8 million float)
ARUN: 29% (17.7 million out of 61.2 million float)
GMCR: 20% (22 million out of 108 million float)
CMG: 13% (3.9 million out of 30.2 million float)
Learn the market before you put up your trade.
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