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Short Sales Statistics

The NYSE Short Interest Ratio

Every short seller anticipates a declining stock market. Investors sell short stock when they anticipate its price going lower. Sooner or later they must cover their short sales by buying back the stock. A profit is made if the stock is bought back at a lower price than when it was sold short. Indicators based on short selling statistics are an important part of technical analysis. Daily and weekly short sales are reported by the NYSE and published by financial sites all over the Internet. Market technicians watch the short selling activities of all the market participants very carefully. They distinguish between the odd-lots and the general public, the so called crowd, and the well informed NYSE members, specialists, floor traders and corporate insiders. When a large amount of short selling activity is occurring, market participants obviously expect prices to head lower. The NYSE Short Interest Ratio is therefore a long-term contrary opinion sentiment indicator. It is calculated by dividing the monthly short interest figure released by the New York Stock Exchange by the average volume of trading per day. These numbers get sometimes distorted by arbitrage transactions, but the short interest ratio is nevertheless a good indicator of optimism or pessimism in the market. Short sellers are potential buyers sooner or later and represent a lot of buying power when they have to scramble for cover in a sudden market turn. Contrary indicators require at least some degree of pessimism in order to function and therefore you should watch this ratio very carefully.

© WallStreetCourier.com THE NYSE SHORT INTEREST RATIO8
6
4
2

Odd-Lot Short Sales Ratio

The Odd-Lot Short Sales Ratio is calculated by dividing odd-lot short sales by the total number of short sales. For stocks, the generally accepted unit of trading is 100 shares (round lot). The Odd -Lot Short Ratio indicates the market sentiment of small investors who purchase less than 100 shares of a stock (odd-lot). These market participants are usually wrong about the direction of the market and this indicator is therefore considered to be a contrary opinion sentiment indicator.

© WallStreetCourier.com ODD-LOT SHORT SALES RATIO0,00045
0,0004
0,00035
BUY
0,0003
0,00025
0,0002
SELL 0,00015
Floor Traders Short Sales Ratio

The Floor Traders Short Sales Ratio is computed by dividing the total floor traders short sales by total short sales. A moving average should be applied to smooth out the swings. Floor traders are normally right about the trend of the market and if they are shorting heavily the market is usually ripe for a correction. On the other hand, if they are doing relatively little shorting it is most likely that the market has hit bottom, especially if public- and odd-lot short sales increase at the same time.

© WallStreetCourier.com FLOOR TRADERS SHORT SALES RATIO
0,00165
0,00145
0,00125
0,00105
0,00085
0,00065
0,00045
0,00025

Specialist Short Sales Ratio

Specialists are responsible for balancing incoming buy and sell orders to maintain orderly markets in the stocks in which they specialize. The Specialist Short Sales Ratio is computed by dividing the total specialist short sales by total short sales. A moving average should be applied to smooth out the swings. Specialists are normally right about the trend of the market and if they are shorting heavily the market is usually ripe for a correction. On the other hand, if they are doing relatively little shorting it is most likely that the market has hit bottom, especially if public- and odd-lot short sales increase at the same time.

© WallStreetCourier.com SPECIALISTS SHORT SALES RATIO
0,60
0,55
0,50
0,45
0,40
0,35

NYSE Member Short Sales Ratio

The NYSE Members Report is compiled by the SEC and issued about two weeks after the applicable date. This indicator is a useful tool to determine what the experts are doing. The NYSE Member Short Sales Ratio is computed by dividing the total member short sales by total short sales. A moving average should be applied to smooth out the swings. Members of the NYSE are professionals and normally right about the trend of the market. If they are shorting heavily the market is usually ripe for a correction. On the other hand, if they are doing relatively little shorting it is most likely that the market has hit bottom, especially if public- and odd-lot short sales increase at the same time.

© WallStreetCourier.com NYSE MEMBER SHORT SALES RATIO
0,65
0,6
0,55
0,5
0,45

Public Short Sales Ratio

The NYSE Members Report is compiled by the SEC and issued about two weeks after the applicable date. This indicator is a useful tool to determine what the public or the so called crowd is doing. The Public Short Sales Ratio is computed by dividing the total public short sales by total short sales. A moving average should be applied to smooth out the swings. The public is usually wrong about the trend of the market. If they are shorting heavily the market is usually ripe for an upturn. On the other hand, if they are doing relatively little shorting it is most likely that the market is near a correction, especially if specialists short sales increase at the same time.

© PUBLIC SHORT SALES RATIO
0,55
0,5
0,45
0,4
0,35

Odd-Lot Balance Index

This index is calculated by dividing daily or weekly odd-lot purchases by odd-lot sales. For stocks, the generally accepted unit of trading is 100 shares (round lot). The Odd Lot Balance Index indicates the market sentiment of small investors who purchase less than 100 shares of a stock (odd-lot). These market participants are usually wrong about the direction of the market and this indicator is therefore considered to be a contrary opinion sentiment indicator.

© WallStreetCourier.com ODD-LOT BALANCE INDEX DAILY1,80 10-DAY MOVING AVERAGE
1,60 SELL 1,40
1,20
1,00
BUY
Odd-Lot/Floor Trader Short Sales Ratio

This index is calculated by dividing the weekly odd-lot short sales by the weekly short sales by floor traders for better comparison. Introduced by Wall Street Courier, the Odd -Lot Short/Floor Trader Short Ratio indicates the market sentiment of small investors who purchase less than 100 shares of a stock (odd-lot). Unlike the more sophisticated floor traders, the odd-lotters are usually wrong about the direction of the market and this indicator is therefore considered to be a contrary opinion sentiment indicator.

© WallStreetCourier.comODD-LOT /FLOOR TRADERS SHORT SALES RATIO0,95
0,90
BUY 0,85
0,80
0,75
0,70
0,65
SELL 0,60
Global Futures Odd-Lot/Specialist Short Sales Ratio

This index is calculated by dividing the weekly odd-lot short sales by the weekly specialists short sales for better comparison. A 4-week moving average is applied to smooth out the swings. Unlike the well informed specialists, the odd-lotters are usually wrong about the direction of the market and this indicator is therefore considered to be a contrary opinion sentiment indicator. High readings indicate heavy shorting by odd-lot investors and therefore bottoms, extremely low readings tops.

© WallStreetCourier.comODD-LOT/SPECIALISTS SHORT SALES RATIO
0,0145
0,0115
BULLISH 0,0085
0,0055
BEARISH 0,0025
Global Futures Public/Member Short Sales Ratio

This index is calculated by dividing the weekly public short sales by the weekly member short sales for better comparison. A 4-week moving average is applied to smooth out the swings. Members of the NYSE are professionals and normally right about the trend of the market. If they are doing relatively little shorting it is most likely that the market has hit bottom, especially if public short sales increase at the same time. High readings indicate heavy shorting by the public (the so called crowd) and therefore bottoms, low readings indicate tops.

© WallStreetCourier.com PUBLIC/MEMBER SHORT SALES RATIO
1,20
1,00
BULLISH
0,80
BEARISH
Public/Specialists Short Sales Ratio

The Specialist/Public Short Sales Ratio is a market sentiment indicator. It is calculated by dividing the volume of the weekly short sales made by the public (non calculated by dividing the volume of the weekly short sales made by the public (non week moving average is applied to smooth out the swings. The public is usually wrong about the trend of the market. If they are shorting heavily the market is usually ripe for an upturn. On the other hand, if they are doing relatively little shorting it is most likely that the market is near a correction, especially if specialists short sales increase at the same time. High readings indicate heavy shorting by the public (the so called crowd) and therefore bottoms, low readings indicate tops.

© WallStreetCourier.com PUBLIC/SPECIALISTS SHORT SALES RATIO
1,90
1,50
BULLISH
1,10
BEARISH
Global Futures NYSE Member Trading Indicator

The NYSE Members Report is compiled by the SEC and issued about two weeks after the applicable date. This indicator is a useful tool to determine what the experts are doing. If specialists, floor traders and other members of the New York Stock Exchange are shorting heavily the market is usually ripe for a correction. On the other hand, if they are doing relatively little shorting it is most likely that the market has hit bottom, especially if public- and odd-lot short sales increase at the same time. Even if data are not quite up-to date, they are nevertheless an excellent indicator of the prevailing sentiment in the market. The formula of the Global Futures NYSE Member Trading Indicator is proprietary and we also use special moving averages to push the tops and bottoms forward an extra two weeks or so.

© WallStreetCourier.com 0,07

THE NYSE MEMBER TRADING INDICATOR

0,05 BEARISH 0,03
0,01
-0,01
-0,03
-0,05
BULLISH -0,07
-0,09