Matt Trivisonno’s Blog

Will wonders never cease? Maybe they will. Take a look at this SPY chart (click to enlarge):

The blue arrows mark the three giant, one-day-wonder rallies since October 10th. As impressive as these rallies were, each one has topped out at a lower level.

The volume has increased on the second and third rally days, but I think this indicates that more-and-more short interest is building up and then being burned off. So this trend may indicate that there is more enthusiasm for shorting the market than for buying it, and the animal-spirits advantage may belong to the bears.

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This entry was posted on Sunday, November 16th, 2008 at 5:10 pm and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.