The True Contrarian Play Isn’t What You’d Think It Is.
By Paul Price of Market Shadows
The short interest signal (below) suggests “Fight your fear.”
After a few bad days (or weeks) in the momentum stocks, traders have turned extremely negative. Many pundits are calling for another big stock market crash.
Should you be worried?
Let’s review a few indicators that have been useful over the years.
NYSE short interest is now at elevated levels seen only five other times since the start of 2009.
History says that is really good. People typically tend to feel emboldened to sell short only after markets have corrected. Note the ultra high ‘short interest’ readings circled on the lower chart shown below.
Just weeks to months after all five of those extreme readings in the past, the S&P 500 was significantly higher. The present day bearishness is a bit surprising as it follows only a flattish first quarter rather than a scary sell-off.
Read the whole article by clicking on the link below…
http://www.gurufocus.com/news/254292/signals-suggest-fight-your-fear
