I think that shorting stocks is morally neutral. Just as I consider buying stocks morally neutral. There can be circumstances that make shorting or going long on a stock morally wrong. Obviously if Bin Laden shorted stocks in front of the attack, it is wrong at so many different levels that I would have a tough time addressing all of them.
Shorting a stock will add to the selling pressure, there is no question about this. One thing that it does though, is help to put a floor on the stock and will help to provide the fuel for a recovery. However, this becomes moot to an individual who can't hold long enough to see the shorts covering. This doesn't apply to drillbits that are going to zero anyway. If it is going to zero, the shorters will not be providing any support along the way and nor will they help to fuel a recovery rally.
So, the answer to your question is that, though I am not short, and not interested in shorting right now, I have no problem with other people shorting right now and overall, I consider it to be a good thing since the higher the short ratio is, the stronger the recovery will be. Nothing like a short squeeze to kick off a good rally.
As far as my overall view. I don't see a lot to be bullish about right now. There is a lot of uncertainty and markets hate uncertainty. Stoctrach has a saying "No Bombs, No Bulls". I agree with him. Right now, it is a "sell the rumor" sitch. When we get news that we have done something definitively and forcefully wrt to the WTC/Pent attack, then I believe that it will be a "buy the news" sitch.
tick and ticknq numbers are getting lower...around -1250 each at the lows. I think we need to hit -1800 to -2000 to mark a bottom. And I think that the Oct 98 lows should be the targets.
I also think a VIX target of between 55-60 is needed before we put in a bottom.
I am not buying anything and I sold stuff yesterday.
And on the idea of patriotic buying (or not selling long positions), I think it is a nice gesture on a small scale, but I think that a more patriotic thing is to make sure that one's household finances are put foremost to a gesture. There is nothing patriotic about not being able to pay one's bills. So, if you have some money that you can throw at the market as a gesture and not as an investment, more power to you. But I don't think it is a good thing if it will hurt you financially (same goes with the idea of not selling long stocks). |
