SPX, QQQ, RUT Short Interest Showing Signs of Life

A renewal in short selling could present near-term problems for stocks

Apr 5, 2017 at 2:06 PM
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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.

s&p 500 index short interest

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.

powershares qqq trust etf short interest

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.

russell 2000 short interest


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