As more stocks, more sectors and more countries around the world start to participate in this bull market, any of the short sellers who overstayed their welcome are getting blown up.
Good.
This is a classic characteristic of healthy bull market environments. I would encourage you to go back and study every bull market ever. You'll find that investors who own stocks are much more profitable than those who are selling stocks.
It's just math.
Here's the thing about short sellers that I think gets forgotten. Short sellers are guaranteed future buyers. Longs are only promising to be future sellers.
The thing is that when shorts are getting squeezed, these can become forced liquidations. And margin clerks don't use limit orders. They'll spray the market, and it will crush you if you're on the wrong side of that.
But if you're on the right side - pay day!
Here is a list of stocks where short sellers are the most vulnerable to get blown up:
The list begins with names that have a high short interest. Then we look at the ones where the number of shares short are exponentially greater than the average daily volume. We call this the "Short Ratio".
But then here's the trick. We sort the list by short-term rate of change. Why do we do this?
Just because a stock has a high short interest, and/or high short ratio, doesn't mean it's getting squeezed. That just means that it's vulnerable to get squeezed.
We sort by that momentum as an indication that the squeeze is already on!
Meanwhile, there are segments of global markets that doesn't quite fit the category of a "short squeeze" per se.
However, the lack of long exposure in China, combined with the record high short interest, puts China right at the top of our Short Squeeze candidates:
And just like we sort our short interest list by short-term momentum, we already know that there's a squeeze happening in China.
Not only are investors NOT long China (we know, we have the data), but there are more short sellers in Large-cap China than ever before.
And our trades are working. That's how we know these short sellers are getting wiped out.
Of the 8 China-related trades that we've put out since the Election, ALL 8 TRADES HAVE AT LEAST DOUBLED IN VALUE!
The Breakout Multiplier System was specifically designed to maximize the returns whenever opportunities like this present themselves.
