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Short Interest in the Energy Sector Hasn't Been This High in More Than a Decade One of the only things that keeps moving higher is something you want to move lower. Julie Verhage .bloomberg.com/ February 11, 2016 — 8:27 AM CST
Just a couple of weeks ago, we pointed out that short interest in the S&P 1500 was at its highest level since June of 2012. Numbers are in for the second half of January, and the picture is only getting worse, with the energy sector playing a big role in the continued climb. As a recovery in the price of oil remains elusive, the energy sector has been dealt a great deal of pain since the start of the year. Market Vectors® Oil Services E T F OIH -17.13 Energy Select Sector S P D R® Fund XLE -10.71 (Y T D returns)
"[S]hort interest levels for three sectors (Consumer Staples, Energy, and Health Care) also increased to multi-year highs, and in the case of Energy, its short interest as a percentage of float [SIPF] level is now above 12 percent to its highest level in over a decade," Bespoke Investment Group points out. "Utilities is a sector that has held up very well this year, but even here traders are starting to step up their negative bets as short interest in the sector increased from 2.9% up to 3.0%."
Short interest, or the quantity of stock shares that investors have sold short but not yet covered, can also be a measure of investor sentiment. The runup in short interest shows the decline in sentiment as investors weather the storm of stocks not only falling but also posting some big moves to the downside along the way. To be clear, the current level is still far from the highs we saw in the financial crisis
Six of the eight most heavily shorted stocks among the S&P (1)500 resided in the energy sector, all with percentage of float levels exceeding 20%: Chesapeake Energy (NYSE:CHK), Transocean (NYSE:RIG), Southwestern Energy (NYSE:SWN) Diamond Offshore (NYSE:DO), Consol Energy (NYSE:CNX) and Helmerich & Payne (NYSE:HP). http://seekingalpha.com/news/3104496-short-interest-energy-sector-hits-highest-decade
As I post this Dow futures up 68, gold down over 1%, Treasuries getting hit and oil up over 5%. Obviously one of these days we are going to get a huge snap back rally and probably led by biotech. Why not tomorrow - Friday. On the other hand, if the stock indexes close down tomorrow this puppy is sicker than sick.
Must be tough to be an oil trader nowadays. A dollar or two may not sound like much - but a 10% move is still a 10% move. Crazy. Wonder if these guys leave work muttering to themselves some days? (assuming they even work out of an office)
The bear doesn't feel like a real bear to me. 2000-3000 points off the Dow from the 18,000 level just doesn't cut it compared to what I've lived through over the years. However, I will note that some of my balanced funds (OAKBX, DODBX, RPGAX are down 8-10% YTD - and that's a serious mugging for the type of people who normally buy those kinds of funds.)
Comments
One of the only things that keeps moving higher is something you want to move lower.
Julie Verhage .bloomberg.com/
February 11, 2016 — 8:27 AM CST
Just a couple of weeks ago, we pointed out that short interest in the S&P 1500 was at its highest level since June of 2012. Numbers are in for the second half of January, and the picture is only getting worse, with the energy sector playing a big role in the continued climb.
As a recovery in the price of oil remains elusive, the energy sector has been dealt a great deal of pain since the start of the year. Market Vectors® Oil Services E T F OIH -17.13
Energy Select Sector S P D R® Fund XLE -10.71 (Y T D returns)
"[S]hort interest levels for three sectors (Consumer Staples, Energy, and Health Care) also increased to multi-year highs, and in the case of Energy, its short interest as a percentage of float [SIPF] level is now above 12 percent to its highest level in over a decade," Bespoke Investment Group points out. "Utilities is a sector that has held up very well this year, but even here traders are starting to step up their negative bets as short interest in the sector increased from 2.9% up to 3.0%."
Short interest, or the quantity of stock shares that investors have sold short but not yet covered, can also be a measure of investor sentiment. The runup in short interest shows the decline in sentiment as investors weather the storm of stocks not only falling but also posting some big moves to the downside along the way. To be clear, the current level is still far from the highs we saw in the financial crisis
http://www.bloomberg.com/news/articles/2016-02-11/short-interest-in-the-energy-sector-hasn-t-been-this-high-in-over-a-decade
Six of the eight most heavily shorted stocks among the S&P (1)500 resided in the energy sector, all with percentage of float levels exceeding 20%: Chesapeake Energy (NYSE:CHK), Transocean (NYSE:RIG), Southwestern Energy (NYSE:SWN) Diamond Offshore (NYSE:DO), Consol Energy (NYSE:CNX) and Helmerich & Payne (NYSE:HP).
http://seekingalpha.com/news/3104496-short-interest-energy-sector-hits-highest-decade
M* Long/Short Equity: Total Returns
http://news.morningstar.com/fund-category-returns/longshort-equity/$FOCA$LO.aspx
Current Commodities Hat tip to @catch22 for this link.Lots of info.
http://www.tradingeconomics.com/commodities
http://www.bloomberg.com/news/articles/2016-02-12/the-oil-industry-got-together-and-agreed-things-may-never-get-better
A few years from now, people will laugh when they read this stuff.
The bear doesn't feel like a real bear to me. 2000-3000 points off the Dow from the 18,000 level just doesn't cut it compared to what I've lived through over the years. However, I will note that some of my balanced funds (OAKBX, DODBX, RPGAX are down 8-10% YTD - and that's a serious mugging for the type of people who normally buy those kinds of funds.)