A battle for the bulls

George Soros came out saying that this was a bear market rally in a Bloomberg interview this morning. The video is at the link.

“It’s a bear-market rally because we have not yet turned the economy around,” Mr Soros said in an interview with Bloomberg Television. “This is not a financial crisis like all the other financial crises that we have experienced in our lifetime.”
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5117859/George-Soros-warns-jump-in-stock-markets-since-March-is-a-bear-market-rally.html

Marc Faber, of the Gloom, Doom & Boom report said the market could pull back 5-10% from these levels.

And the SEC is voting on the new shortselling rules, but they've come up with some proposals that are toothless, and favorable to the brokerage firms that have been profiting by facilitating the shorts "wishes."

The WSJ pretends that the naked shorting problem has gone away:

Securities regulators and some financial firms are making it more difficult for investors to pile on when stocks are falling and further drive down prices.

"The majority of these failures-to-deliver are not the result of honest mistakes or bad processing," former SEC commissioner Roel Campos wrote in a letter posted on the SEC's Web site. "Rather, these companies are instead targets of illegal and manipulative trading, with intentional failures-to-deliver used by traders to extract profits as the share price plummets."
http://online.wsj.com/article/SB123906125118595065.html#mod=testMod

In September, when short selling was banned, stocks had a great rally, until October 3, when the SEC gave the "market makers" the short selling exemption back.

They of course, used that exemption to help facilitate shorting and to pass it on to their clients.

Without question, a lot of the strength of this latest rally has come at the expense of the shorts.

Now you have an excuse for profit taking by a couple gurus, and the possibility of still toothless enforcement from the SEC.

That news, makes this dip, a tougher one for the bulls!