As the S&P 500 rose by 11.3% from July 10^th through July 28^th short interest fell sharply – on the New York Stock Exchange by 10.3% and on the NASDAQ by 5.1%.

As covering intensified, investors concentrated new short positions in companies with well-know bearish stories. On the short side, this is a relatively defensive position which is the equivalent of a long investor owning 3M or Coca-Cola. Companies: PALM, VPRT, MTG, RHT, DECK and DTV.

Short Interest as % of Shares Outstanding
(Sector averages in gray.)

PALM INC (PALM)

VISTAPRINT LTD (VPRT)

MGIC INVESTMENT CORP (MTG)

RED HAT INC (RHT)

DECKERS OUTDOOR CORP (DECK)

DIRECTV GROUP INC (DTV)

Short investors believe that coal will take a beating in the Obama administration, perhaps for environmental reasons. Coal producers or heavy coal users – some of the largest new short positions – included ANR, FCL and MIR.

Short Interest as % of Shares Outstanding

ALPHA NATURAL RESOURCES INC (ARN)

FOUNDATION COAL HOLDINGS INC (FCL)

MIRANT CORP (MIR)

Short investors are also skeptical of rapidly advancing stock prices in China. More air moving into the bubble could lead to its bursting. New positions focused on two large Internet companies – SINA and SOHU – that have collapsing revenue growth and weakening fundamentals.

	SINA	SOHU
Short Interest Score©
Short Interest (as % of shares outstanding)
Revenue Growth (Trailing 12 months)