It looks like the uptick rule will be re-instated next month. I am not an advocate of it as I don't think it will solve the problems we have. It seems - in my humble opinion - that lawmakers, business leaders, and everyone else should be more concerned about the fundamentals of the economy and how to run their company than the stock price and my ability to short it (when the economy is booming, do we put an obstacle in the path of people wanting to buy stocks...you can only buy on a downtick?). Common sense dictates that if a company is run well, it will consistently generate profits and the stock will rise. But it has become obvious over the past 12-months that most companies are NOT well run, and most business leaders are out for themselves; they have no qualms about destroying a company to increase their short-term payout.
So it is time to deflect the issue! Instead of focusing on business fundamentals, our blame everyone and everything else society focuses on - for lack of a better word - bullshit.
Having said that, it will not fundamentally change trading for me. I traded with the uptick rule longer than I traded without it. And before it was abolished, I did not know any different so I will just return back to that mentality.
I will say this - I hope it sparks a rally, no matter how illogical it is. I don't see them repealing it again once they re-instate it, so I hope the market starts a leg up based on the news. I read somewhere (though I did not confirm it) that the market rallied 50% in four months when the rule was originally established in 1938. So bring it on..I am ready for some long entries!
Here is the story, and here is my favorite quote...yes, the elimination of the uptick rule caused the economy to collapse!
Critics of short sellers, including Charles Schwab and the head of the New York Stock Exchange, Duncan Niederauer, have argued that the rule's elimination has contributed to the economic downturn or is harmful to issuers.
...on a side note - I want to give a shout out to Dinosaur Trader and thank him for aiding me in my continued success.
Trading 27-April-2016 (+ $66)
22 hours ago