NASDAQ Short Interest Rose Again (May, 2007)

As of mid-May, short interest in 2,752 NASDAQ Global Market(sm) securities totaled 8,205,105,350 shares compared with 7,819,110,519 shares in 2,756 Global Market issues for the month of April. The May short interest represents 3.94 days average daily NASDAQ Global Market share volume for the reporting period, compared with 4.17 days in April.  Short interest in 529 securities on The NASDAQ Capital Market(sm) totaled 195,673,578 shares for May, compared with 192,482,412 shares in 537 securities for the month of April. This represents 2.49 days average daily volume, compared with last month’s figure of 2.99.

The cut off date used was as of May 15, 2007 settlement.  Trading volume is higher on average, because despite the increase in total securities being short it is actually representative of fewer "days to cover."  You can see the table below, but keep in mind that these "totals" represent more securities than the figures above and that makes the number higher.

            DATE                     SHORT INTEREST      STOCKS

        May 15, 2006                 6,451,337,395           3,301
        June 15, 2006               7,188,384,593           3,299
        July 14, 2006                 7,139,899,294           3,300
        August 15, 2006            7,268,106,428           3,286
        September 15, 2006    7,353,774,333           3,294
        October 13, 2006          7,414,701,519           3,312
        November 15, 2006      7,004,368,041           3,311
        December 15, 2006      6,924,409,737           3,288
        January 12, 2007           6,884,364,389           3,279
        February 15, 2007         7,044,297,013           3,292
        March 15, 2007              7,893,983,530           3,287
        April 13, 2007                 8,011,592,931           3,293
        May 15, 2007                  8,400,778,928           3,281

We’ll be making some comparisons tonight ot tomorrow, but here is some of the NYSE short interest data.  Most of these saw their short interest rise as well.  The most shocking outright was the increase seen in the short interest in DJIA components.  Out of the 28 listed on the NYSE, only 4 posted a lower short interest than April. 

As people think that drug stocks and medical devices might offersome safety in 2008 and beyond, you will be surprised to see the increase in the short sellling in medical land. Ouch.

Many short sellers are fighting with Warren Buffett and Bill Gates by making financial bets that the two billionaire moguls got it wrong on buying the railroad stocks.

Energy was mixed in short interestin an area where at least the short sellers might have figured out thatrising oil and gas prices might mean higher prices to the underlyingstocks.

Short selling is up in brokerage firm stocks as well.  Maybe the rising market and the private equity landgrab for investment banking fees is just a farce to the contrarians.

The short selling in banking stocks was at least mixed, so the sellers aren’t betting against everything.

As the homebuilder cycle is at bottom, close to bottoming, or at whatever point you want to call it…..the short selling is up betting on a further drop in housing, and on a day that the homebuilders rose.

Semiconductor short sellers just aren’t stopping, even if the sector has defied much of the logic so far.  Chips, Dips, Chains, and …..short sellers!

Jon C. Ogg
May 24, 2007

Jon C. Ogg can be reached at [email protected]; he does not own securities in the companies he covers.