“Unsustainable” short covering seems to be driving the market higher

Throughout June an interesting started to appear in equities. According to TwoRivers Analytics, which specializes in high-quality investment ideas, with an emphasis on short ideas, investor sentiment seems to have reached an inflection point.

Specifically, according to Eric Fernandez and team, the market is currently experiencing a break down of momentum stocks along with what TwoRivers has labeled "sharp short-covering."

According to Eric, the risk appetite among investors is currently mixed, a reversal from the trend seen earlier in the year. Throughout June momentum stocks took a breather and stocks that had fallen the most earlier in the year bounced back. High growth equities also suffered along with momentum. In fact, all the measures of growth tracked by TwoRivers underperformed the...