I’m always interested to hear investors talk about short squeezes. It seems like “squeezing the shorts” is something that always happens nearer the end of a trend than the beginning of one.
(A short squeeze occurs when traders who have sold short a stock are forced to compete with one another to cover, or buy back, the shares they have borrowed as the price rises.)
There’s also something about it that strikes me as gloating. Near the end of a trend the bulls have become fat, happy and full of confidence. “Squeezing the shorts” is akin to running up the score just to embarrass the other team and reeks of hubris.
I’ve heard some “short squeeze” chatter recently so, purely out of curiosity, I decided to take a look at Google Trends to see how popular the term was and if it had any market correlation.
Interestingly, I found that the search term is currently more popular than at any time over the past few years:
Peaks in the popularity of the search term also neatly correspond with market corrections over that time:
Obviously, this is too little data to extrapolate anything of much value. Still, if I were bullish this might make me pull in my horns a bit.