Without Uptick Rule, Downside Will Rule

Starting Monday, you could see some real nasty things happen to companies that mess up. You will see them banged down harder and faster than you would ever believe.

The corollary is true, too, though. You will see some real squeezes upward because people will be much more reckless in what they short and when.

This rule change, of course, couldn't come at a worse time. The market's terrible. Longs are beleaguered, shorts are emboldened. I think it is fair to say that things are about to get a lot worse, a lot faster for the stocks of bad companies without the slowdown circuit breaker of the uptick rule. But the SEC, in its non-infinite wisdom, dreamed this little doozy up and all I can tell you is that you ain't seen nothing yet.

For me, personally, this rule is enough to make me want to get back into the hedge fund game. My stock in trade was to know what was a bad quarter faster than anyone on earth. I was king of that game. This new rule would have been a license for me to print money on the short side. Not that the SEC would know that kind of stuff, though. It's too busy worrying about the small stuff.

Oh well.

Get ready for some real volatility, which, of course, is just a code word for downside action!

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James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS by clicking here. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to [e-mail]. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict."