ETF Update: A Short Squeeze

The casino environment that has become Wall Street and investing in general continues. It leaves mainstream investors scratching their heads, but even more importantly, it’s a major turn-off.

We had become oversold and in such conditions a stampede is easy for some trading desks and hedgies to start in the opposite direction. Besides, it’s fun to squeeze the shorts right?

So, what sparked the rally? Earnings and a positive outlook from IBM (IBM), a late short squeeze in crude oil from Da Boyz in the trading pits, and a sense that more bailouts (oh goody!) are coming for our banker friends as hinted by the tax cheat Geithner.

Volume was a higher than yesterday while breadth was just shy of a 90/10 positive day for this day in the casino.

Current action can only be described as violent and to most, irrational. It’s about so-called professionals on trading desks at banks (using your money of course) and hedgies who are having fun pushing markets one way or another.

For longer-term investors versus day-traders all this action is a turn-off. Count me in the former category.

Nevertheless, earnings are on tap and anxious bulls are trying to find good news from deliberately lowered expectations.

Let’s see if the ball lands on black or red tomorrow.

Disclaimer: The ETF Digest has no positions.

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