Short Sellers: Split Decision On Financials, And Bailing Out Of Tech (WM)(WFC)(WB)(BAC)(JPM)(MER)(FRE)(FNM)(MSFT)(QCOM)(DELL)(BRCM)(KFT)(GM)(AMR)

Shorts sellers suffered from a lack of conviction on the direction of financial stocks in the period that ended July 31. They were clear that betting against tech was no longer a good idea.

While the short interest in Washington Mutual (WM) rose 25% to 341.1 million shares and  Wachovia (WB) and Wells Fargo (WFC) were both up about 7%, the short position in Bank of America (BAC) dropped 9% to 125 million. Shares short in Merrill Lynch (MER) fell 14% to 54.9 million and dropped 8 million to 48.9 million in JP Morgan (JPM).

Perhaps the most odd pairing on the list of short positions at the end of last month was the two quasi-government loan companies. Shares short in Fannie Mae (FNM) fell almost 8 million to 146.5 million. The short interest in Freddie Mac (FRE) rose 13.4 million to 119.4 million.

Short sellers did want out of tech. Shares short in Microsoft (MSFT) fell 7.7 million to 55.8 million Short interest in Qualcomm (QCOM) fell 7.6 million to 25.9 million. Shares short in Yahoo! (YHOO) dropped 7.1 million to 41 million. The short interest in Dell (DELL) dropped 5.8 million to 65 million. And, shares short in Broadcom (BRCM) dropped 8.4 million to 18.8 million.

The one significant exception in tech was Intel (INTC) where shares short rose 16 million to 106.3 million.

Other moves of note included a 140% increase in shares short in Kraft (KFT) taking its total to 86.8 million, a 12% drop in the short interest in GM (GM) down to 142.3 million, and a 22% drop in shares short in AMR (AMR) to 47.4 million.

Douglas A. McIntyre