Short Selling Tick Test-- Bye Bye!

[thetradingdoctor]

It is a general axiom in the markets that perception trumps reality. As we all know, both are relative and, thus, can be reasonable or unreasonable---it just depends on who you/what/where you are.

Thanks!

Doctor Jance

[The Bear]

Doc i finally read this article. Here's my comments:

>I cannot see how that does not cause more volatility

This is purely an opinion piece. This person has ZERO DATA to back up their conclusions.

>This will make the price become oversold to a point where value investors step >in and cause the stock to whip back up. The whip back up will be exaggerated >due to the fact that short-sellers now need to cover and buy at any price.

This WILL do that, and this WILL happen. Unless you have access to the data that matters, it's impossible to come to these conclusions, even by looking at the TICK. I've been watching the TICK and the DOW for some time before the removal of the rule....and I've witnessed many 1000 readings.

>The specialist and market makers have a new dynamic to contend with now >after the rule change. Before, they could see short sellers in their book >waiting for up-ticks to be executed.

Exactly, they have some advantage here, and now it's been taken away from them for the better. Additionally all this talk about Specialist is sort of dated. The specialist system is slowly diminishing. The NYSE Hybrid system pretty much killed most of them. The floor is a very sleepy place these days, simply because they can't make as much money anymore.

I personally would be OK to see all of them removed and just have IT guys operating the systems. I can't say for sure that they would have an advantage over a small speculator like me, because I have no data to back it up, but removing all of them LIKELY couldn't hurt me in any way.

They had a reporter on CNBC trying to justify their staying there, as they were blaming John Thain or someone (one of the execs) for killing them. Their claim is that, when the bear raid starts, it would be that much worse if they weren't there. To me it sounds like a poor attempt to justify themselves.