Saturday, April 4, 2026 
La Palanca Es La Culpable
A trade is a trade is a trade and even though I’ve been on a bearish tirade I will most definitely flip positions and get bullish real quick if I see a bullish parade.
I think the key will be tomorrow. Will there be follow through tomorrow?
The most bearish thing I have heard all day is that they may try to ban short selling. If this happens, it would be the gravest of grave errors and it would send the market reeling.
Short selling is a necessary part of having liquidity in our markets. The market is not going down because of short sellers. The market is going down because banks and insurance companies turned themselves into hedge funds and they used too much leverage.
The reddest of red flags that a company is in dire trouble is when they start to blame short sellers for their problems. The government is blaming short sellers? Wow. Do you know how obvious you are? If you blame short sellers for this mess, you are basically telling us that we should have absolutely zero confidence in anything you say ever again. Seriously.
Companies that have had widely publicized collapses (Worldcom, Enron, Lehman, Bear Stearns etc.) always, at some point, blamed short sellers for their troubles.
Short sellers are not to blame. La verdad. La Palanca es la cupable (the truth is the levarage is the guilty).
But that does not mean I cannot turn bullish. I see nothing that makes me even remotely bullish. Yet. I am watching the trend channels. If markets start to close outside of these trend channels, I will have to start pulling in my short exposure. For now.
If short selling is banned, we may witness the wildest move in volatility that we have EVER seen. Historic volatility. Why? Imagine what people will have to reach for to hedge. If they can’t hedge with shorts, they will HAVE to buy puts. Yes they will HAVE to buy puts. When they HAVE to buy them they will pay ANY price. It is when you have to have insurance that unprecedented, historic moves in volatility occur.
Peace
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