Transcript
Hello, everyone, welcome to Friday, what a day today was really big powerful day, the market opened up a lot above where it closed the day before, held in there all day made almost two and a half percent gain on the S&P 500. It was a really powerful day. And the leadership again, was from the industries that had been the most beat down in the downturn, energy financials like banks and what have you. And industrials, those were the three biggies today. And that seems to be what’s been happening for a while now with this recovery.
The last, say, 10 days, we’ve had this, you know, leadership from the parts that fell the most, we’re starting to see airlines do well, and those types of things. And so there’s some expectations that things are going to do well. But one of the things to consider here as part of this, what’s called short interest, so short interest is, if I want to short a stock, I actually borrow it, let’s say ABC stock, I borrow it, and I sell it in the market at $100. If it drops, I buy it back at $50, I get to keep the $50 profit. The problem with shorting is that it could go up to $200 or $300, or what have you, and I have to buy it back at that higher price. So there’s actually unlimited loss potential when you’re shorting a stock. And so what they’re talking about right now is just really high short interest, there’s a lot of people that think the market is going to go down.
When it goes up, it squeezes those shorts, and they start to panic, and they have to buy back the shares in order to, you know, reduce their losses. Well, of course, that’s the buying that’s coming in. And so you see a lot of short interest in energy and financials and what have you, it these these leadership positions that are happening today. So that’s part of the reason why we’re seeing those run so heavily is because we’re wiping out those shorts as they panic to get out of those positions. This is not a bad thing. It’s sort of a normal scenario for how these things unwind. But today was a great day and a really good follow through day all together. So I want to thank everybody. I hope you have a great weekend and I look forward to talking to you on Monday. Thank you.