Exactly. The Karachi stock exchange (trailblazer that it is) banned short selling earlier this year. After an initial 11% pop, the market fell to 25% below pre-short ban levels. Shorts provide downside pressure when they sell and upside pressure when they cover - just like longs who buy and then sell. There's a long history of exchanges around the world banning short sales. It has never stopped a market going down but it has sucked liquidity and transparency out of the market on each occassion.
In fact, I would bet that every time in the history of man, when short selling has been banned, the market then went on to go lower.
I remember it well, when the Greeks with their thousand ships were approaching Troy we banned short selling, and we know where it all ended.
I find this very interesting: http://www.federalreserve.gov/newsevents/press/orders/20080923a.htm I think the Japanese are setting themselves up to buy distressed Ibanks. Or perhaps just to bid on distressed assets. Could Goldman Sachs be a future partner of a Japanese bank? How the tables have turned. Hmmmmmmmmm.... nitro
There is support SPX 1182 and ES 1182 since there is no basis between the cash and future. If we go through 1182, it is probably a retest of the 1132.xx lows... nitro