Yes and No. The ability and willingness by market participants...

Yes and No. The ability and willingness by market participants to engage in short selling is diverse. In general there are predominately two type of short players usually at work. There are those that require liquidity to function and those that create it. One has a short life cycle - short flow short holders, and the other - short interest short holders, generally does not. The distinct differences in the nature of the two will have a distinctly difference impact on trading liquidity. The key here is to look beyond just the aggregates as most do and look closer at how turnover is comprised. A good place to start to better grasp this is by comparing the daily gross shorts reports with the movement in the aggregates. Hope this helps.