In order to 'rally', you need buyers with real money. If all the FTD's were forced to cover or return, the money to buy would have to come from somewhere?
If they don't have the cash to cover, then they are going to sell somthing...and if that is a security you now have downward pressure on the markets. And of course there is the possiblity that they would just liquidate and run...
Needless to say, investor confidence would plummet, adding further downside pressure..
Obviously the SEC needs to do somthing...
Remember the proceeds of the naked sales that are sitting in limbo?
And of course there is the possiblity that they would just liquidate and run...
Yes, if they liquidate their shorts, they'd be buying. Prices would rise.
Needless to say, investor confidence would plummet, adding further downside pressure..
You lost me again. Why would rising prices cause investor confidence to plummet?