April 8, 2009
I am writing to you to submit my proposal to the short selling rules.....I believe the Market Wide UPTICK TEST rule is the best decision to curb short selling raids.....All three of the -10 circuit breaker rules are useless, because the short sellers can still manipulate the price below the previous day's low, which will cause technical investors stop loss orders to be triggered and close the stock lower for the day. A short selling bear raid does not need a stock to drop -10% a day to drop a stock.
If short sellers can eliminate the bid price to below the previous day's low which can be as low as -1% that is enough to destroy investor confidence and trigger panic selling.
The under normal circumstances the best decision is the UPBID TEST rule but, looking at the state of the economy I strongly support the market wide UPTICK rule. it will better support a positive GDP growth.
Pat Gualtieri