Come Out, Come Out, Wherever You Are

With the small caps in the IWM breaking out in a more pronounced way this morning, combined with the recent furry of heavily-shorted stocks squeezing, you have to think that shorts in small cap names are either a stubborn bunch or are simply hoping for an imminent pullback in which they can cover. 

However, considering that the IWM chart has essentially been basing sideways for weeks on end, it is tough to make the case that today marks some kind of euphoric blow-off for them. Hence, my inclination is to think that the more heavily-shorted IWM names are fair game to force the issues with bears and send them on the run for a big squeeze higher, essentially going the way of Max Cady in this scene. 

There are quite a few examples of heavily-shorted, small cap names moving well this morning, be it GOGO or various biotechnology issues. One underrated name, however, seems to be retail play Guess?, below on its daily chart. 

GES has been a steady mover higher in recent weeks, followed by extremely quiet periods of tightening back with no price giveback along the way. This morning's strength clearly threatens a fresh leg higher which would actually print multi-year highs if successful and likely provide more horror for stubborn shorts if this IWM breakout has legs.