About the recent rally in financial stocks

I do not understand why the SEC rule about prohibiting shorting some financial stocks can be bullish.

A rule distorting the normal functioning of some sectors of the markets makes me nervous. The government keeps changing the rules of the game and we do not know what they are going to concoct next.

Is the new rule solving the fundamental issues faced by banks? I doubt it. For this reason I feel the rally has the flavor of a trap. Time will tell.

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George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977