Plenty of Shorts Are Still in Action

If they aren't short, who is doing the buying?

I am reacting to Doug Kass' comment in Columnist Conversation about how nobody is short anymore. I am not talking about AIG (AIG - commentary - Trade Now), where 50% of the trading for the last two months has been short -- oops! I am talking about the day-to-day positioning of people. I think there are a lot of select shorts.

Let's take Cisco (CSCO - commentary - Trade Now). The shorts were in there killing the thing five minutes after the earnings were released. The text of the earnings release was bullish, and the stock traded up to $22.50, and then John Chambers did his characteristic, totally characteristic caution rap, and the next thing you know, the stock had dropped a dollar. I don't know any longs who were panicked out, because the numbers and the statements were pretty darned bullish. But the shorts? They couldn't resist. They need an uptick rule to protect themselves.

There's also tremendous put-buying in the machinery stocks, as the excellent report by Judd Pyle to my right explains. Those are huge short bets.

There were a ton of short bets in retail, as retail had run, and the shorts figured on easy pickings. Nope, another scalding. But they were short.

In many cases it is similar to what I see on the site, where there are endless calls, for instance, about shorting and re-shorting and re-shorting again the REITs. I think that sentiment is typical of the hedgies out there.

And I think that there are a ton of hedge funds short the oils and the oil services.

In short, I think there are shorts being put out every day, in HOLDRs, in those nasty and wrongheaded double and triple leveraged ETFs and in the put market, and it just ain't working, and the shorts get scared at the end of the day or the longs just can't resist, or money comes in over the transom, and they buy 'em at the end of the day.

Whatever it is, I think there are plenty of shorts out there, and they just keep trying and trying and trying.

And not succeeding.

At the time of publication, Cramer was long CSCO.

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Know What You Own: In Thursday's trading, the most active stocks included Citigroup (C - commentary - Trade Now), Bank of America (BAC - commentary - Trade Now), CIT (CIT - commentary - Trade Now), SPDR Depositary Receipts (SPY - commentary - Trade Now), AIG (AIG - commentary - Trade Now), Ford (F - commentary - Trade Now) and the Financial Select SPDR (XLF - commentary - Trade Now).

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