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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: Vendit™ who wrote (3680)	1/10/2005 8:20:12 AM
From: Walkingshadow	Read Replies (1) \| Respond to of 8752

I doubt it. The market was overbought, and long overdue for a correction. I think most likely the reaction was a bit strong mostly because it was overdue, and also because many traders were gone for the holidays. They came back and got busy. I think the charts and volume patterns tell the story pretty well, and it was as you predicted. Bearish divergence, etc. The market had been hovering or going up a bit because of a temporary lack of selling pressure, and that probably accounted for the bearish technical divergence. I saw the posts on that new rule, and my feeling is that it probably doesn't make much difference. Except that it might be harder to short stocks now, since if they don't have inventory, they will have to try to borrow, and there might not be enough to go around. That strikes me as being kinda dumb... decreases liquidity and the ability to short, which together should lead to less market efficiency. T

To: Vendit™ who wrote (3680)	1/10/2005 9:02:28 AM
From: Walkingshadow	Read Replies (1) \| Respond to of 8752

FWIW, I got this on the newswires: According to Barron's, beginning Monday, the major stock exchanges will begin posting lists of stocks that have a certain number of shares which have "failed to deliver." This serves as a proxy for shares sold short without the seller's broker having firmly arranged to borrow them. These so-called "naked short sales" have been targeted by regulators. Exchanges must now publish stocks with many unconsummated trades, a rule meant to force brokers to clean up the practice. The SEC rule, called Regulation SHO, requires that any stock with at least 10K shares and 0.5% of the stock's float categorized as failed to deliver will be on the threshold lists. Brokers will then be required to cancel or close out short sales in these names, presumably through forced buying of the stocks. Heavily shorted small stocks likely will show up on this list, and many traders have decided to speculate on potential upside "short squeezes" by buying them in anticipation. Early indications are that popular day-trader favorites and short tgts such as TravelZoo (TZOO), American Pharmaceutical Partners (APPX), Biosite (BSTE), Pre-Paid Legal (PPD), Martha Stewart Living (MSO) and Novastar Financial (NFI) will be featured on the initial lists. T