I day trade the market daily. I have sold short exclusively since January and I have not entered into a long position since January. It is my understanding naked short selling is illegal, but I imagine it goes on. The SEC was a pathetic agency before Chris Cox took it over and he has done nothing to change that. If you are not buying stock long on margin, then you should tell your broker that you do not want your stock available to be borrowed for shorting purposes. As far as the downtick rule goes, I do not care if it reverts back. I was a profitable trader before it came about and I will adjust. But getting rid of the downtick rule has created more intraday trading range and for intraday traders who are willing to take both sides of a trade like myself it has created more opportunities at least on the NYSE as I never trade four letter stocks.
Also, are you sure it would work? I don't think the idea from yesteryear of keeping your shares for sale at an above current market price ever made a dent.