CNBC Stock Blog

Short Interest 'Very High' — But Is It Actually Bullish?


With the Dow inching closer to 11,000, lots of stocks hitting 52-week highs and more M&A activities on the rise, is the individual investor gaining confidence in this market? Art Nunes, portfolio manager at IMS Capital Management, and Charles Biderman, president and chief executive of TrimTabs Investment Research, discussed their insights.

Confidence of the Individual Investor

“They’re coming back, but slowly, and mutual fund cash flow numbers indicate that the individual investor is putting in approximately $4 into bond funds for every $1 they put into the stock funds over the last five weeks,” Nunes told CNBC.

“So they’re coming in, but dipping their toe in the water.”

In the meantime, Biderman said he sees “very little” money entering the equity funds.

“Up until middle of last week, we’re seeing inflows into bond funds at almost a record pace, which is scary,” he said.

“We are seeing a dramatic pick up in short-interest: mid-March short-interest was the highest since July.”

“We’re seeing very high buying of leverage-short ETFs and very heavy selling of leverage-long ETFs—and that’s bullish on a contrary basis,” Biderman added.

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No immediate information was available for Biderman or Nunes.