Not quite. Yesterday's close was quite unusual. A large number of stocks just went parabolic in the last 1 hour, and for no apparent reason, and by that I mean why did techs rally with financials. There was talk of Treasury helping/bailing out the banks but why should that affect Ctrip or Baidu or Apple or RIM. BTW Baidu has been blocked by a number of social networks in China from indexing their subscribers' pages. And this news has been and is supposed to affect Baidu negatively. So what the hell happened?
I have a theory, that a significant number of large hedge funds (including quants) were heavily short on equities which included in addition to the above mentioned two, large fractions of tech, energy and financial sectors. The short-selling ban put their covering into overdrive.
The moves in these stocks are significant enough to warrant some explanation. I saw this happening yesterday before close and it continued in the pre-market today.
Now my 2 cents on this short-selling ban. There was a time when these ginormous banks made huge and I mean freaking huge amount of $$$ naked shorting companies all over the world. Now the tables have turned and its payback time. But not yet, SEC and Treasury won't allow such illegal behavior. How dare these local funds and foreign funds and all these evil doers short our stock and that too without borrowing. It look like in an unfair blackjack where you are not allowed to count cards. Rules are changed as soon as the other side starts winning. Its not that the other side just played unfair with the financials, rather it was the greed and absolute stupidity that brought this on. I am not saying naked shorting is right in any way, what I am saying is that SEC's wake up call is timed perfectly with financials getting beaten up.
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