I believe the shorters provide some stability in that their buy/sells are counter to the longs and they help volume to turn over. I do not believe that the shorters set the price for the market. Like water the market always seems to find its own level.
that all said...we have had a short covering rally for 2 days after a short ban......And still, in the absence of shorters the market is still falling as if they were active.....but we know they aren't active......so where does that leave us when we reach the point where the shorters would normally cover.
The present action says little about shorters and a lot about the current state of the market.
