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Last weekend I posted the short sale ratio indicator which pointed out that the public was heavily short and the specialists weren’t quite a bearish. What this could potentially signal is a short squeeze could ensue very shortly. It was dead on to the tune of a 945 (11.29%) point rally in the Dow for the week. 98% of the time this indicator doesn’t tell you squat, but when it’s at extremes it definitely pays to listen up. Since I’ve been tracking it earlier this year, it’s 2/2 for signalling when the markets could bounce.

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