The pessimism is so thick you could cut it with a knife. If we could put our contrarian hats on for a few minutes, you will quickly come to the conclusion that the stock market does not go when the majority sees something being obvious. In fact, the market is probably at its best when it frustrates the majority of the people playing a particular direction.

Phillip Erlanger, at Erlanger Squeeze Play (www.erlangersqueezeplay.com), reported this today;

"Short interest rose 11.42% on the NASDAQ in its report released after the close yesterday. Overall no sectors saw a drop in short intensity from last month, and short intensity rose in 16 out of 18 sectors. For the month, large jumps occurred in electronic technology, technology services, health services, health technology, utilities, retail, consumer durables, consumer non-durables and producer manufacturing."

e 14 sectors (out of 18) with average short intensity above 45%. Last month there were 11 sectors above 45%. Two month's ago was the first time in 4 months for a sector to sport a short intensity rank above 50% - this month there are a whopping 11 sectors with short intensity ranks above 50%."

"Short interest in all NASDAQ securities totaled 7,188,384,593 shares for June, compared with 6,451,337,395 shares in May — an 11.42% rise. Last week the NYSE reported a 5.50% jump in short interest. Is the market about to rally against these short sellers?"

Phil does a great job predicting market swings with his short data, but in the short run, this week’s FOMC meeting could create some short term uncertainty.