The Long And Short Of Short Interest

Here is a brief review of period-over-period change in short interest in the May 1-15 period in nine S&P 500 sectors.


 (SPDR materials ETF)

Two weeks ago, XLB (59.33) broke out from a late-January falling trend line, but building on it has proven tough.The ETF Monday faced resistance at the daily upper Bollinger band, failing to take out prior high from April 18, hence no higher highs.

The 200-day lies at 58.61.A test looks imminent.


 (SPDR energy ETF)

Tuesday, XLE (76.57) rallied intraday to three-year high 79.42, but only to reverse and end the session with a bearish engulfing candle.

Shorts have been gradually adding, and they may be onto something.This has the potential to be a major top.For now, nearest short-term support lies at 74.50-ish.


 (SPDR financial ETF)

Unlike the S&P 500 and many of its sector peers, XLF (27.94) still lies beneath a trend line from late January, failing to go toe-to-toe with 10-year Treasury yields, which jumped from 2.72 percent on April 2 to 3.12 percent on May 17.

Thursday, the 50-day (27.78) was tested and saved, although the path of least resistance near term is down.The 200-day lies at 27.27.


 (SPDR industrial ETF)

Since February 9, XLI (75.83) has made lower lows.From the low of May 3, it rallied nicely, which stopped this Monday just outside the daily upper Bollinger band.The 10-day was defended in subsequent sessions.

Shorts have gotten aggressive the last several months.  The bulls would cherish a squeeze, but the daily chart is itching to go lower near term.


 (SPDR technology ETF)

On May 14, XLK (69.80) rallied to 70.42, coming close to testing its all-time high of 71.34 from March 13.Since that unsuccessful test, the ETF has come under pressure, but the bulls are hanging tough.

For the last several sessions, bids have appeared just under 69, with not much help from the bears.Short interest is relatively low compared to how it was in the latter months of last year.

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Disclaimer: This article is not intended to be, nor shall it be construed as, investment advice.  Neither the information nor any opinion expressed here constitutes an offer to buy or sell any ...

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