Why does the stock market keep falling with all of the good efforts of the Fed and Treasury?

Traders can push the stock market up or down for a very short period, but ultimately they have no choice but to yield to buying or selling by non-traders such as the hedge funds and mutual funds. Mutual funds hate to sell into a falling market, but in the past few weeks they have been inundated by redemption pressure from a very anxious and nervous public and have no real choice but to dump stocks to raise cash to pay those redemption requests. That redemption selling lags any good news, so we could see Main Street continue to sell mutual funds (and hence stocks) for quite some time. Also, since the U.S. economy is at least partially in a recession, there are a lot of people who may be dumping mutual funds simple to replace the paychecks from jobs that have been lost.

Whether any of the selling pressure today is due to post-ban short-selling is not yet clear. Besides, there are plenty of stocks to short that are not covered by the short-selling ban that covers financial stocks.

There are probably some trend-following hedge funds which believe that the overall market trend is still down, so such funds would automatically be selling into any market strength or rallies.

Finally, there are still a lot of people on Wall Street who believe that we simply have not yet seen a "classic" setup for "capitulation." They will continue to sell/short into any market rallies until there is a sky-high spike in the VIX "fear index." VIX is quite elevated, but there not yet been a monster spike. I would note that the "new" VIX has never seen a true capituation since it was reformulated in September 2002.

-- Jack Krupansky