No Bottom Yet

Wednesday, October 08, 2008



Anonymous said...

Would the uptick rule make it harder for falls like today for the last hour?

Brandon Rowley said...

The rapidity of it, yes. But, the fall itself, no. The uptick rule is just a mechanism to slow the ability to initiate a short position. So, it's just tougher to get into a short. More or less, down movements would just take more time.

Yet, I'm not sure that the fall yesterday was a result of short sellers. I think it was the buyers of the last 2 hours selling. They stepped in believing they had found a reversal bottom and when, on the third attempt, the market couldn't break through the highs of the day, they panicked out of their longs.

I'm biased but I'm against re-instating the uptick rule. I think it hurts the efficiency of the market.

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