Michael Holland Says Short Positions May Lead to Stock ’Melt-Up’

The number of short positions in the U.S. stock market is “so high that, if we get some good news, we could get a stock melt-up,” said Michael Holland, chairman and founder of Holland and Co.

“For traders it’s a treacherous environment,” Holland said this morning in a radio interview on “Bloomberg Surveillance’ with Ken Prewitt and Carol Massar.

Traders are anticipating ‘‘clogged arteries’’ from European policy makers as they meet this weekend to try to resolve the region’s debt crisis. ‘‘Surprise good news would force investors to buy securities to close out all those shorts,’’ Holland said.

To contact the reporter on this story: John Tucker in New York at jtucker@bloomberg.net

To contact the editor responsible for this story: JoAnne Norton at jnorton@bloomberg.net

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