High Short Interest Stocks Have Sharply Outperformed the Market Benchmark so far in January...
- Goldman Sachs 'Most Short' Basket (GSCBMSAL) beating SPX by more than 12% as of end-of-day 1/17/23
- Sharpest outperformance in recent years on trailing 10-day basis
- Ranks in 99th %ile vs the history of short basket data (back to Sep '08)
While it's never easy to identify the exact inflection point... the current episode of short covering could be in the later innings... for a few reasons:
- Pace of short-covering has been fast & furious
- In terms of cumulative notional $$, last week's short-covering in US equities ranks in the 98th percentile over the last 5 yrs
- Driven by both macro products & single stocks
- While US single stock shorts have been net-covered for 6 straight sessions on the Prime book, macro products (index & ETF combined) saw renewed shorting activity on Friday (1/13) & Tuesday (1/17)
- Recent risk unwinds seem to have been stabilizing over the past few sessions
Given the action today (1/18)... safe to say that \YES... the short-covering has indeed run out of steam\**
Submitted January 18, 2023 at 11:30PM by Winter-Extension-366 https://ift.tt/vl9wTo7
