We are seeing some extreme readings on the put call ratio and we need some time to work off these oversold readings. Remember that the crowd is mostly wrong. Given the the Facebook IPO was a flop and expectations so high we may see more follow through on the downside at the open on Monday but I suspect we’re close to some sort of bounce.

Let’s be clear. Any bounce is that we get will be an opportunity to add more shorts in my opinion. There are so many oversold sectors that if the market bounces we should see a lot of great short trades.

Copper below is confirming a bearish economic picture is brewing.

3 Responses to “Short Trade Is Getting Crowded”

  1. Steven Vincent Says:

    Under normal circumstances I would agree with you about a bounce, but I think we will see a bona fide crash and then a much larger rally. These are not normal circumstances.


  2. jeff pierce Says:

    I would be cool with a crash as well as I am still holding a small short position. We are getting in a grey area where a crash could happen but those always have a small odd percentage. I’d say 85% we bounce and 15% we crash. Every day we’re down I would say subtract 5% from the bounce category and add it to the crash one. Bottom line…bulls need to step up now.

  3. jeff pierce Says:

    nice charts on your site btw.

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