shorts - some facts

Croc started a thread re shorts and mentioned the 3,573,414 that were reported as gong short on Friday. This is true, they did.

But the problem with the short data is that it doesn't tell you the whole picture.

Since July last year the average total outstanding number of shorts has been approximately 15 million.

On 4 May, 5 million of those covered which left 10.8 million outstanding (the figures are rough because as some cover some go short - Bungi has the spreadsheets and graphs posted here previously - I am working off my spreadsheet which calculates total shorts and covered shorts from the daily and total shorts ASIC data).

On 7 May, the day croc was talking about, a whopping 6,387,773 shorts covered leaving a total outstanding number of shorts at 8 million (10.8 - 6 + 3 = 7.9 million)

Thus, the shorters used the recent downturn to cover their positions (nicely hidden). Keep your eye out for a change in substantial holder notice because I think if we see a repayment of these borrowed stock we will see an end to the shorting.

My guess also is that those that went short on Friday were not "smart money" as they were not aware that the smart money was covering. These are the poor fools who will get burnt and it is they who will give us the short covering rally.

Sorry for the length of this but I wanted you to get a feel for what is going on.