Its no secret that stocks have been falling across the board the past month or so. Last week we officially entered into a “bear market” in the US. Currently, investors can’t seem to shake off the bears and finish a hard strong rally. Breath in the market has been weak and declining for the past 5 weeks.
As of right now the markets cannot seem to find any traction point in which to rally. One very potent stat in this market is the level of short interest in the market as we speak. Some market observers believe there is over $100 billion worth of stock current short, a incredibly high figure that at some point will have to come down. Which leads me to the idea that at any time in the next couple weeks we could see a potent short-covering rally which will take the major market indexes considerably higher. From some of my research metrics we could see a rally of 4-7% in the three major market indexes.
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