It doesn't even matter if there are sources.
With short interest up 40 percent, a trader might reasonably presume "the herd" is getting in over its head. Eventually those short-sellers will have to buy their shares back. Bad news goes only so far. So you go long on the pummled stock.
On the other side of the trade, you do a hedge with (presumably) cheap UAL puts. We don't have the actual and exact numbers here, but it looks like they were September puts and out-of-money (meaning they'll get dramatically cheaper every day if they don't reach the strike).
Cheap insurance on a bear raid.
Makes sense to me.
It's a plausible story, but so are 1000 other stories.
The problem with the story is lack of facts.
The investment letter isn't named, much less quoted.
The investor isn't named.
The broker isn't named.
All of that smells to high heaven. How can the reporter be sure of these facts and omit to name names?