The US and European tech indices exhibited similar returns early in 2024, but the US continued to rise, while Europe stalled. Short interest in Europe has declined as prices fell, suggesting covering, while US short positions rose during its market gains, indicating a reversal strategy. We use the S3 Black APP {APPS BLACK<GO>} and the Bloomberg Terminal to analyze this use case.

The European and US tech indices have exhibited similarities, with Europe outperforming in the first half of the year; however, it is now underperforming.

While both broader indices recorded similar returns in the first half of the year, the US market continued to rise in the second half, whereas the Euro Stoxx has stalled.

In terms of short positions as a percentage of float shorted, the US proportion has remained stable. In contrast, in Europe, short positions initially decreased as the sector outperformed, indicating a momentum strategy.

Recently, as the European index has declined, short positions have diminished, suggesting either covering during the downturn or a reversal strategy.

The US market is now witnessing increased shorting during its upward movement, which also indicates a reversal strategy. Consequently, both the European and US markets are exhibiting reversal strategies.

This graph illustrates several US tech names, including AVGO, CRM, ADBE, and AMAT.

This graph displays select European tech names, including CAP FP, REY IM, SOP FP, and the average

Tech indices in the US continue rising, while Europe stalls. Both markets now show reversal strategies through short interest activity, offering valuable insight for traders.

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