hedge fund short squeeze.

Discussion in 'Trading' started by Free Thinker, Oct 3, 2003.

  1. i think a lot of gunslinger hedge funds got caught short because tuesdays selloff by all rights should have been perfect short setup. here is what one said today.

    Cody Willard
    Holy mackerel
    10/03/03 12:41 PM ET

    Can you imagine the hedge fund managers who are down on the year, who piled in the shorts on Monday and Tuesday, got berated by their partners on Wednesday for being down YTD, told their partners not to worry because this really was the "Big One" and they were pressing all their shorts, and now have started off the fourth quarter already down another 3 or 4%?

    That, my friends, is what we're seeing in action right now. I'd guess that out of all those shorts maybe 10% of them are covering 10% of their shorts today. And this dynamic -- this buying begets more buying dynamic -- is why Mr. Streak's theory that all shorts must be taken out back and shot before this bull phase is over is looking like it really could play out. What happens if the market doesn't crack by late November. December could be absolutely monstrous to the upside.

    I know I'm feeling the pain for having added to my QQQ net short the other day. And I know that the remaining small short I have left on the sheets are painful too. But I'll tell you that that the big shorts whom I speak with are literally dying here. Dying a slow and painful death.

    Wonder if Al Michael's is still short.

    net short QQQ
  2. This Dec Qtr will surprise a heck of a lot of people - the 'wrong-way crowd' - in producing very solid gains. Therein lies the additional fuel for the run-up to crest NAZ 2000+ by end of year.

    Sectors such as Telecom equipment suppliers (believe it or not) and Wireless will be among the strongest performers for NAZ.

    Shorts will win small battles on retracements here and there but the trend and easy $$$ is still being a bull.

    As for shorting, I don't get it.
    Why o why do people keep on picking tops...like picking nickels in front of steamrollers..

    Above is purely from a trading perspective.
    Don't forget the Santa Claus rally...
  3. Moohead


    "Why o why do people keep on picking tops...like picking nickels in front of steamrollers.."

    Because if you picked the top right, you look three times smarter than the rest of the six pac Joe. You can then say " I told you, Wahahaha!!!!":D
  4. Many will claim to have picked "da top"...conveniently forgetting the numerous times they got pounded out from lower levels.

    You know the saying about picking tops and liars, eh?


    ps. Say a little prayer for those shorts (hedgies and retail) on EXPE (who remembers the movement post-takeover announcement?!) ROOM EBAY...just to name a few..
  5. lescor


    There's a lot of traders out there who learned how to trade in the bear market and they are more comfortable going short than long. Just like the perpetual bulls got hit over the head non-stop for a few years, this new habit (bias) is hard to break.

    I speak from experience here.