Hi @1912 I credit the late great @hermans (what happened to...

Hi @1912
I credit the late great @hermans (what happened to him?) with giving me a bit of edu-mu-cation about shorting.
Though I kind of argued a lot with him about it - much of what he said rang true and he would probably know - cos he admitted to doing a fair bit of it himself.

First - nah. We can't take shortman or ASIC's numbers as complete gospel.
I don't think we can ever find "accuracy" when talking about shorts.
It's too dark back there behind the curtain.

By that I mean - who can say if every single short is reported?
If its a quickie - then covered - then placed again - is that one short or 2? etc etc.
Chances are its much more widespread and unreported than anybody could guess.

I took the same view as you before, as to ASIC representing the total number of uncovered shorts and then tallying them in my head as to how far that would push the price for them to cover, but I now believe they more accurately represent the number of shares currently leant out for shorting.
Only when they've been covered and handed back to their "rightful" owners do they get removed from the records.

Think of the shorts like a bunch of taxis. Some of them will have a passenger (be already sold on market). And some will just be waiting around and not deployed (yet or possibly ever).

So - the outstanding shorts number represents the number of shorts that have been or can be deployed.
Not necessarily the ones that are already sold and need to be covered in the future.
It represents the number of shares currently leant out by whoever owns them, instos etc.
This is my understanding of how @hermans explained it - and it may or may not be 100% true. But it feels sorta right. If someone can offer a more insider view of the short-trading broker's trading floor then I'd be happy to get more education.

If you think about it this way, it explains why the number of shorts remained fairly constant even through December/Jan as the price rocketed.
They would have had to have rocks in their heads to lose 100% on those 30c shorts.
Shorts were still being deployed each day on a gamble that the trend would reverse, and then covered at a loss - but still kept on hand to be used again another day. Same as happened today. They got a walloping yesterday. And rolled up for work to be smashed again. But their shorts are in and out all day long and, by the feel of it, almost exclusively day-trading style. That explains the big pushes at close.
They have to close that position each night and don't care what they have to pay.
(if only retail could be a little more patient - we could really make them pay for the pain they hand out each day...)

My theory is retail shorts are more likely to be "long". They'll try to find and ride a down-trend, then rock up at the forums and down-ramp the hell out of it to help out.

One thing is clear though. The appearance of certain posters - Soho etc - has now become a buy signal for me. Just as someone who buys after weeks of sp running hot can expect to be walking into a correction, then shorts that come after weeks of downtrend can expect to be basically performing an act of charity as the share price swings back up.
This isn't 2016.
The company is producing and performing well and the rationale for shorting it is just daily opportunism - not trying to shine a light on incompetence.

I read the daily short report just about every day to give me an idea of what is going on.
They will never leave us alone while we are in the ASX200.
It is simply one of the plays that the brokers make to find the price action of each day.
Awful on the way down, but gives us strings of these days when Big Longs and retail work out all they have to do its line wipe in the arvo and let the short covering push it past resistance.

Looks to me that we're set for a run with a fair big momentum now. 50s is a cinch.
The main game will be cracking back into the 60s as Contract 2 boosts the company's fortunes.
A bit of good news about SDV and it should break into the 70s.