Interesting article on high pessimism/shorts and how that can fuel the current rally.
Short interest is apparently at an 8 year high. If they have to cover their shorts in a rising market, that's a lot of fuel.
on the other hand, they see a market worth shorting.
http://finance.yahoo.com/news/1-trillion-short-underlying-u-040001196.html
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Skepticism is one thing this rally hasn’t lacked.
Amid its biggest about-face in nine decades, a funny thing has happened in the U.S. stock market, where rather than loosen their grip bears have grown ever-more impassioned. They’ve sent short interest to an eight-year high and above $1 trillion, by one analyst’s math. Position reports from the Commodity Futures Trading Commission show mutual fund managers are more skeptical now than any time since at least 2010.
In short, disbelief is running rampant after $2 trillion was restored to share values in six months. A chorus of Wall Street prognosticators says that’s a big reason the rally can keep going.