Ringgenberg's Short Sale Index: Short sellers are more bearish than they have been in 20 years - poor prospects for the stock market

Ringgenberg's Short Sale Index: Short sellers are more bearish than they have been in 20 years - poor prospects for the stock market

According to a report by www.finanzen.net,

The short-seller community apparently believes the stock market is overvalued: According to Ringgenberg's short-sale index, the mood of short-sellers is currently as bearish as it was when the dot-com bubble burst. According to Ringgenberg's index, short sellers have been particularly aggressive recently and the pattern of the index is similar to 2000 and 2008. Ringgenberg sees a significantly increased probability that the stock market will fall in the next 12 months. Its derived short selling index has risen sharply, suggesting that short sellers are particularly aggressive and expecting lower prices.

Ringgenberg's analysis suggests that the likelihood of falling stock markets over the next 12 months is significantly increased. Its derived short selling index is constructed so that its long-term average is equal to zero - a positive value means "abnormally high total short sales" and a negative value means "abnormally low total short sales". In September and October, the index rose sharply, indicating abnormally high overall short selling and strong bearish sentiment. Ringgenberg compares the index's current pattern to 2000 and 2008, and he sees similarities that suggest an impending peak in short interest. This suggests that the probability of falling stock markets over the next 12 months is significantly increased.

This data suggests that investors should prepare for the possibility of lower prices in the coming year. Ringgenberg's analysis also challenges the assumption that short sellers are inherently unethical actors. The short sellers view stocks as overvalued, indicating that the markets may be overvalued and could experience corrections in the future. Overall, Ringgenberg's analyzes point to an uncertain future for the stock market.