Salient to Investors:

  • American short sellers have been hurt for 5 years by the biggest market rally since the Internet bubble.
  • Bearish wagers in the SPDR ETF are near 11 percent of its shares, the highest level since 2012. Bearish wagers against a technology ETF are 67 percent above the 12-month average.
  • Hedge Fund Research said short selling hedge funds have endured losses in four of the past five years and returned -1.8 percent in 2014 through May 31.
  • Markit says the average company in the S&P 500 has 2.3 percent of its shares borrowed by shorts, near an all-time low.
  • US stock valuations are approaching 2007 levels.
  • Walter “Bucky” Hellwig at BB&T Wealth Mgmt said not too much market optimism is bullish.
  • $4 billion exited in May from the S&P 500 ETF, which has $164 billion in assets. Domestic share funds have received $4.8 billion in 2014 versus $25 billion in bonds.
  • Frank Maeba at Breton Hill Capital is short the S&P 500 ETF said the market is not worried about immediate tail risks.
  • The CBOE Volatility Index is at a 7-year low.
  • The S&P 500 is at 16.5 times estimated earnings, the same as at the end of the last bull market in late 2007. Tech stocks are among the most expensive stocks, with,, Facebook and Autodesk all above 39 times expected earnings.
  • Ed Hyland at JPMorgan Chase Private Bank said US equities will move higher while the economy is growing and earnings are rising, and feels very good about market levels and the economy.
  • Stephen Solaka at Belmont Capital said this is one of the most-hated bull markets, with many praying for the market to drop.

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