I agree with your premise that today's trading activity was the more healthy combination of investor accumulation / day and swing trader activity and not the toxic debt conversions and shorting scenarios that have viciously eroded shareholder value over the past several weeks. As the maximum number of authorized shares are attained and issued into the tradeable float, the ever-increasing supply will cease.
However, while I agree with you that some of the short covering activity was in collusion with the debt conversions, which would result in a wash in terms of the number of shares that were shorted that needed to be covered; BUT I also believe there was a significant amount of naked short selling (the illegal practice of selling shares that have not been affirmatively determined to exist) that was not coordinated with the debt conversions, thus resulting in more shares being sold that actually exist. When these shorted shares need to be covered, a rise in demand will lead to price appreciation.
A look at otcmarkets.com indicates that as of December 15, 2014 there was a whopping 639% increase in short selling activity with an average daily volume of 8,625,604 shares shorted each day throughout the 15-day period tracked by the website, a known authority on OTC stock activity. I believe this shorting activity far outpaced the debt conversion ratio during the same time period, thus resulting in more shares being shorted than actually exist.
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