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If you have been shorting last week you may be in great danger.

When you short shares your brokerage borrows them from another client. The
person who buys those shares then has them in his account. They can then be
lent to another trader who wants to go short. There is no end to this
string and the same block of 1,000 shares can soon appear as hundreds of
thousands, or a million, shares short when the actual stock involved is only
1,000 shares! This is the internal structure of the short bomb, a pyramid
of mythical stock.

The market turns and all the shorters decide to cover. What happens? The
market is very, very short of stock to fill these orders as many are based
on stock that has been swapped over and over again. The price goes into
orbit to attract sellers, who in turn become more determined to hang on
until they see a top. This buying panic could restore the market to old
highs in one day!

For more, and better, market intelligence, planning and successful trading
see http://stx.mainpage.net

The Stock Surfer