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To: Poet who wrote (2315)9/15/2001 10:58:39 AM
From: Rambi  Read Replies (1) of 51710
 
From a post on MarketAttack -- defending the shorts

Message 16352001

Why the Shorters will support this Market better than any other investors

For this analysis, it's most simple to understand and consider shorts as guaranteed potential buyers of securities. A shorter simply does the same transactions as normal investor, but the Shorter does them in reverse order. The Short sells the stock first and then buys a later. Though the order is reversed the goals are still the same. Both longs and shorts attempt to buy low and sell high. The average consumer or the average investor may not have the courage to invest with all of this uncertainty, however the Shorters will.

The first buyers and the continued buyers will be the shorts covering their long-term shorts from the now concluded bubble cycle. Alan Greenspan knows this which makes it all the more unlikely for an emergency rate cut in, he will wait to toss that in October. Beginning right after the first selling pressure, and then continuing through the next Fed meeting the market will gain strength. And this strength will be on the backs of the shorts. As these hedge funds and individuals complete the cycle of their profitable trades. Many Shorters could even feel patriotic about this action. But if you look at where the market was on Monday, the actions of covering and shorts buying their stocks back what if begun regardless.

I believe the bombings are without a doubt a defining market bottom and a defining capitulation. Though our collective anger may remove urges to panic, our anger won’t make investors purchase into uncertainty. But that bottom after the open will inspire Shorters to begin to buy back their stocks. The shorter much like a wolf, is a much misunderstood animal. The wolf does not create the environment, the wolf reacts to the environment. Though some of speculated that bubble might be wise to attempt to restrict short sales this would be foolhardy and stupid. You can not take a balanced system and remove parts of it, and have the same check and balances needed. The market is designed to be rapidly self correcting.
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