11 AUG 2011, Thursday

• Oh no...not again!  Don't they ever learn???  Europe considers ban on short selling from NY Times.  Those evil short sellers!
• It failed in the fall of 2008 here in the US (MISERABLY) and it will fail there as well.  The Securities and Exchange Commission (SEC) banned shorting in US financials on 18 SEP 2008 and a month later they were down 48% (chart above)...how'd that work out for them...huh?   
• Politicos think that they can eliminate risk to the big banks (which are disintegrating due to poor business practices).  But ya know......we just have to....must...bailout the bankers.  Right?  Hmmm...how has that worked since 2008?  All's well...sunshine and rainbows?  Maybe, something different, novel, should be tried...capitalism where failures fail.
• Eliminating short sellers, especially in a falling market, eliminates the first source of buying pressure to halt the decline.  Think about it....when a market is falling hard, who would be more likely to step up and buy first?  A short seller who has made his money and must buy to exit his position?  Or a fresh new buyer who can't resist the value despite the downward momentum being overwhelming?
• It's a progression that halts the decline.  First, shorts cover which slows the downward momentum and then bulls noticing the slowing momentum start to look for buy spots after a base forms.  Simple!
• Hasn't been much to say regards markets.  Volatility is outrageous...feels like 2008 in many ways.  And many people know that, learned back then and are going a little slower this time.
• Repair / basing must happen first for any bounce.  No need to rush into anything.
• Reminder...below all MA's....check charts in sidebar.
• Trying to provide alternative views that have some merit....a trading rally is near due to severr oversold. Timing it with current volatility is the incredibly difficult part.  Reference this for what is possible.  I will note that three of the five times did roll over to new lows at least temporarily.