GOOG Short Squeeze

Oh goody - Momma Cramer's favorite little boy Jimmy says that once GOOG gets to 513 then a "short squeeze" will send it to 520. I say Bull Snot! If GOOG gets to 520 it will do so on its own merits and not on a short squeeze and here is why.

The fact is Goog was never higher than 513 so far. Since all short sales were made from 513 and lower I'm not sure what he is talking about.

If there was a short squeeze going on in GOOG it happened in the last eight trading days which is obvious on this daily chart.



You can see that during the first three days of the last eight there was rapidly elevated volume - this is probably a lot of short covering. First the market turned on 12/26 but the volume wasn't there. It then went up strong on the next day but still no volume. The next two days it went down. So far the shorts are not afraid.

Then we had the three day week. You see that spinning top candle on 01/03? That suggests indecision and because the shorts couldn't sell it down and the bulls couldn't buy it up there was a standoff on that date with heavy volume. The next day it opened and went up That's when the shorts started grabbing every offer they could. The next day was a another opportunity to close the shorts. Then it was pretty much over. If anyone was still short after that they are morons. Not that aren't a lot of morons managing money (I know of several personally) but the pro's should've been out by then.

If they weren't then the two gap ups on the last two days would have had huge volume and they didn't. Nobody stays short on a gap up - not even a moron.

In addition the two gap ups the last couple of days are relatively small candles (for GOOG) with declining volume on the second gap. If increasing volume means increased volatility in a stock - which it does - what does decreasing volume mean? Well it could mean a three day weekend but if I were short significant shares of GOOG at this time I think I'd be scurrying around to cover.

Unfortunately neither I nor Jim Cramer will be able to prove our contention - isn't it time for short interest to be reported in real time? Nah - the brokerages would never permit it - you might discover how often they take the countertrade in order to force the squeeze.