Short Squeeze, page-350

I had the same theory about the shorters playing the price to drop MSB out of the AS 200, but sometimes conspiracy theories don't hold. The balance date for determining the index is the 2nd last Friday before the re-balance month - ie 18th Feb. Nothing much was happening around then. It was just bad luck for the longs and good luck for the shorts, with MSB just pipping out. The SP on 18th Feb was $1.14 and the index a bit lower than it is now, so any significant increase int eh SP vis a vis increases in the index, will see MSB back in next re-balance.

My guess is that the shorts se a window in the next 2 months to unwind, because the risk of an index re-balance bringing MSB back into the ASX 200 spiking the SP as shorts rush to the exit, is pretty real. So, my guess is they'll be looking to gradually unwind and take advantage of any bad trading days. Hopefully that will support the SP on bad trading days and we'll drift up. In the meantime they'll be applying a standard cap and net trade strategy to keep a lid on the SP and hoping to keep MSB out of the ASX200, with the added advantage of the trades caught in their net reducing their short exposure.

Absent news, when the short% are falling I'm positive - but AIMOO.