No Bottom Yet

Wednesday, October 08, 2008

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2 comments:

Mark Porter said...

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

Name: 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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