Short interest on SPX, QQQ, and RUT increased in the most recent reporting period
Short interest has been on the rise in recent reporting periods. According to Schaeffer's Senior V.P. of Research Todd Salamone, this sign of growing caution could be a near-term speed bump for
stocks, after a period of short covering helped carry the market off its pre-election lows. Here's a quick rundown of the short interest backdrop on the
S&P 500 Index (SPX),
PowerShares QQQ Trust (QQQ), and
Russell 2000 Index (RUT).
SPX Short Interest Near Annual Lows
In the latest reporting period, SPX short interest rose 1.25%. But these bearish bets are still at relatively low levels, leaving room for more bears to pile on. According to Schaeffer's Senior Quantitative Analyst Rocky White, S&P 500 short interest ranks in the bottom 20th percentile of its annual range.
QQQ Short Interest Just Off Multi-Year Lows
Short sellers have taken a more active interest in the tech-heavy QQQ of late, with short interest rising 2% in the latest reporting period. The exchange-traded fund (ETF), as a reminder, serves as a proxy to the Nasdaq-100 Index (NDAX). There's still plenty of room for additional short selling on QQQ. Short interest ranks near the 19th percentile in both the one- and five-year time frames.
RUT Short Interest Approaches a Historical Norm
Finally, short interest on RUT edged up 0.8% in the most recent report. Historically, currently short interest is in the middling 51st percentile of its annual range, suggesting short sellers have been less reticent to bet against small-cap stocks.
