Monday, January 21, 2008

High Short Interest Names

The following stocks have high short percentages. The numbers in parentheses next to the symbol represent the short % of the float. All numbers are from Short Squeeze. I have rounded the numbers up or down accordingly.

The reason I'm posting these is because should we get some type of panic bottom, short covering could be huge. I remember from reading Reminiscenses of a Stock Operator that Livermore looked to cover shorts on huge events or down days.

Also, I just went through the stocks on my screens, not all the stocks on the NYSE. If anyone knows of other good stocks to trade with high short percentages, please share. I didn't include the homebuilders, because I generally stay away from stocks that trade below $15 a share.

Here's some stocks that could see substantial short covering during a market bottom.

VMC (11) RWT (33)
TNH (11) JLL (11)
TRA (18) MBI (37)
PMI (19) PCR (16)
MTG (25) AMG (21)
ABK (35) LAZ (14)
FMD (30) GHL (39)
FED (69) CNS (27)
DSL (59) BSC (16)
UA (32) LNN (16)
AGO (13) ARE (12)
AIT (11) AXE (10)
AZZ (9) ANR (11)


Since a lot of people seem to be expecting a surprise rate cut now, let's talk about a potentially larger problem than a stock market meltdown.


Stock Market Crash of 2008?

Just something interesting to think about. Last week, the S&P 500 lost 5.4%. That was the worst weekly drop in over 5 years.

Guess what? Right now the futures are down 60 points. That's almost another 5% overnight and a 10% decline in the last 5 trading days.

Meanwhile, the IBD is busy speaking truth to power. Read below.

Individual stocks continue to tumble. Stocks that led the market's most recent rally have fallen especially hard. It's odd, then, to see analysts upgrade leaders that have started breaking down.

Research In Motion, (RIMM) Potash (POT) and Fluor (FLR) each garnered upgrades Friday. All three stocks fit the profile of the leader that has started to crack in heavy volume.

Analyzing the market's past winners shows how and when leading stocks top and start to roll over. These diving leaders are exactly the sorts of stocks you should be selling to protect your capital. Yet Wall Street continues to tout these names.

No one can know with absolute certainty which way the market will turn from day to day. But it's worth remembering the lessons of the past.

When Cisco Systems, (CSCO) Microsoft (MSFT) and others started selling off in 2000, many analysts urged investors to grab them each time they fell to new bargain prices. Those that heeded that advice learned a painful lesson: When the market goes into a downtrend, the only absolutely safe place to be is in cash.

Trying to outsmart the market has proven fruitless lately. Even defensive stocks like utility, food and beverage firms have gotten slammed. As it stands, this market has few, if any, safe havens.

HPT Caught In This Mess

This is hard to watch. If you've traded, you've probably had a moment like this somewhere in your past. (h/t mdawsz)

Warning: harsh language.... NSFW.

Stock Futures Trader Having Rough Day - Watch more free videos

HPT, keep your chin up and read your blog from back in August, the last time this happened. You'll come back. You will.

More on the huge global market decline here.

UPDATE: It's a shame, but HPT's video was removed from Youtube. I'm guessing because of the harsh language. Funny... you can post a video of 14 year olds beating the shit out of each other, but you can't say the word "Fuck!" How idiotic.

Futures -43.00

I hate to disrupt the holiday with some bad news, but look out below!

The Dow futures are down 300. That would mean an open at around 11,800 tomorrow.

Here's what Bloomberg has to say about the "rout."