Market Manipulation

Markets don't move, they are moved.

Markets work on supply and demand, but not as we're taught in school.

In most cases, its not increasing demand that causes prices to rise, but rising prices that cause demand.

Its not increasing supply that causes prices to fall, but falling prices that cause people to dump their holdings and therefore increase supply.

The professionals, that is specialists, market makers, syndicates, often release supply(or remove demand) into the market when bad news comes out having previously accumulated at lower prices or shorted their holdings because they know the news before its released.

They have to, there's just too much money involved.

If this sounds like a conspiracy, its because it is.

A trader can see the professionals at work in the market through price/volume analysis and piggy back their moves.



Porks.

Quite wright!

Check when the options expire - puts as well as calls. When you know that you have to know the volumes traded during a specific day and act in the opposite direction of the "market". Nice examples are all stocks traded on both sides of the Atlantic Ocean. Same goes for US-stocks traded in Europe when US are closed. Guess it´s an easy way of not losing money and hopefully make some in those stocks or rather in the options. A long & short chart is also needed.

Porks said:

Markets don't move, they are moved.

Its not increasing supply that causes prices to fall, but falling prices that cause people to dump their holdings and therefore increase supply.

The professionals, that is specialists, market makers, syndicates, often release supply(or remove demand) into the market when bad news comes out having previously accumulated at lower prices or shorted their holdings because they know the news before its released.

Porks.

Click to expand...

Aren't you contradicting yourself here?

Not really,

The prices are manipulated lower and its these lower prices that cause an increase in supply from weak holders being 'forced' to dump their positions.

It happens everyday in every market,

You said you don't agree, care to expand on why ?


Porks.

You're saying that falling prices are not caused by increasing supply but by released supply. What's the difference?

In this case, its the cause thats the difference.

But in many cases the manipulation will be a rapid mark down of prices, just like we see with testing.

What accounts for a test, a rapid mark down of prices from a base used to identify if enough floating supply has been removed from the market to allow higher prices, who marks this price down but more importantly, why, if not to manipulate many in the market to do one of three things, all resulting in losses ?

Yet understanding this manipulation for what it is makes the picture clearer.

For me anyhow,

Porks.

So you're suggesting that many of these prices are false prints?

Not at all,

I'm suggesting the price is manipulated down to test the market.

Further I'm suggesting when the news is bad, panic selling everywhere, who's busy absorbing all this selling, is it too much to consider that whoever is benefiting big time may have a hand in much of the bad news ?, especially as the very organisations reporting the news are listed and controlled by, guess who ?

I'm not saying the market price is absolutely controlled, I'm saying it's manipulated by being nudged this way and that (the markets momentum does the rest) to meet the objectives of the manipulators.

However I accept your experience and knowledge is way beyond mine, what's your view ?

Or would you rather keep feeding me the rope first ?

Porks.

You're getting into a chicken or the egg thing here that may or may not be of intellectual interest but which is of no practical value in trading. At the very least, it is boxing in whatever conceptual construct you have created and is thus affecting your perception.

It's tempting to say that whether the market moves the price or price moves the market is immaterial, if not irrelevant. And in the broader view, it is immaterial and it is irrelevant. However, carrying this baggage around with you affects the way you perceive and conceive the market, and that is neither immaterial nor irrelevant.

Yes, there may be some global conspiracy lurking in the shadows waiting to trick you out of your hard-earned money. But believing this will affect your trading in a way that may not be particularly productive over the long term. In addition, it is not neither necessary nor desirable to hold this view in order to be a successful trader/investor.

dbp,

I don't hold the view that 'they' are trying to trick me out of my hard earned money, rather 'they' are trying to make loads of money by tricking the crowd.

Market manipulation seems to have been believed by many of the old masters(Wyckoff), some even took part (Livermore).

Come on dbp, give me a reason why :

- All markets are regularly tested

- Panic selling is absorbed during bad news, for prices to rapidly rise shortly after.

- Prices are rapidly marked up when a trading range is present to the left to encourage holders to keep their stocks and not add supply into the market, enabling 'them' to keep marking up the price without this additional supply.


And who believes there is any chance whatsoever that the markets could crash before the election ?

I respect you're knowledge dbp, but how can it not benefit a trader to track this manipulation and follow its footsteps ?

Porks.

Who, exactly, are "they"?

45% of vol in US is done by computers, so that can cause a lot of volatility and also be used to manipulate

Whether they can or not is a different matter than do and are.

As to volume in the US, the US markets are traded worldwide. Who does the buying or the selling is not as important as the fact of it.

dbphoenix said:

Whether they can or not is a different matter than do and are.

As to volume in the US, the US markets are traded worldwide. Who does the buying or the selling is not as important as the fact of it.

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Exactly . And it up to the individual to analyze the market him/herself.
I did not mean to go off topic posting to your thread Db, was just explaining the reason the S&P didn't swing much at the 1130 level. No mystery or anything. It was a trade that went wrong and I wanted to find out why??? Now I've learned something else.

erie

All markets are manipulated at one time or another for various reasons. The fact that one is aware of it should suffice. There are various ways of manipulating markets and it goes without saying that it is very painful when you are on the wrong side of it. Once a trader has accepted the fact that it occurs (and it is widespread), the next step should be to mitigate the effects. As an example, there are many forex traders that will not trade the Yen when it gets to certain levels because they feel that the BOJ will step in. Some will say that this is not market manipulation but it is, and if you are trading in the wrong direction you will be nursing heavy losses. Other traders advocate staying away from share trades prior to the expiration of options because the big trading houses manipulate prices during these periods.

In that regard, you're manipulating the market every time you place a trade. Are you one of "them"?

Porks said:

If this sounds like a conspiracy, its because it is.

Click to expand...

Surely mentally observing the market from this standpoint will be detrimental to your trading as it will suffocate your thought processes, limiting the amount of positive information you’re able to absorb.

On originally reading your posts I got a sense of exasperation on your part that there are all these professionals continually manipulating the markets with the intention of separating you from your hard earned currency. The tone of your post suggests you feel victimized by this process.

On re-reading your posts you state:

A trader can see the professionals at work in the market through price/volume analysis and piggy back their moves.

Click to expand...

Yet understanding this manipulation for what it is makes the picture clearer.

Click to expand...

I now feel I mistakenly misinterpreted your position. I believe you too feel that announcements of analists (analysts) buy/sell recommendations, possible takeovers; media tipping etc. all constitute manipulation by insiders with the intention being to move price to areas which will be to their benefit.
Can you confirm this?

Personally I find it helpful if I view the markets as a game, encompassing strategic moves, bluffing etc. much like chess but more, as I understand it, like poker.

Good thread.

Rgds.

If it is felt that every time I place a trade I am manipulating the markets, so be it. How that equates to what the BOJ or exchanges do I do not know. I do not have a problem with manipulation, it comes with the territory and it is the nature of the beast. For some it provides ample opportunity to make money.

“Hidden behind the facade of pompous jargon and noble affections, there is more sheer larceny per square foot on the floor of the New York Stock Exchange than any place else in the world.” Those were the venomous words of Richard Ney, an actor turned investment advisor in the early 1970s. In retrospect, was Richard Ney correct in his brash assessments of floor trading specialists? What about the exchanges? Why should ETF investors care?


Well in mid-February 2004, a full 34 years after Mr. Ney attacked Wall Street's untouchables, the five largest floor trading specialists on the NYSE formed a tentative agreement to pay $240 million to settle charges of ill-gotten gains reaped from innocent investors. Can you believe that? This was proceeded by a December 2003 bombshell announcement of a lawsuit from Calpers, America's largest pension fund, alleging seven floor trading firms used their knowledge of pending orders to profitably trade their own accounts and that the NYSE failed to correct the matter. Without surprise, this mess caught the attention of the SEC and they've begun to investigate the practices of specialists on the NYSE, (currently home to 5 ETFs), the American Stock Exchange, (home to 100+ ETFs), and others that still use this archaic system to trade stocks, ETFs, and options. Can order matching technology reach humanity before it's too late?


_____________________________________________

The money stolen from many is divided among few.

_________________________________________


Without going into anymore gory details, let's just say Mr. Ney called it, though it took everyone (us included) a few decades to notice the subtle financial gimmickry of the specialist system. The impact of a rigged marketplace for investors of individual stocks and ETFs are clearly negative. “The New York Stock Exchange is not an auction market – prices are controlled absolutely by the specialists.” For years, Richard Ney was passed off as an outdated kook – but now he's anything but. Perhaps this explains why he would ride around Beverly Hills in his Rolls Royce all alone – just him and his dog.


Thankfully, we sense meaningful change on the way. Even Lucky Luciano, a confirmed criminal and mobster took note of all this. After he visited the floor of the NYSE and someone explained to him the role of the floor specialist, he commented,
“A terrible thing happened. I realized I'd joined the wrong mob.”

SOURCE: ETFmarket

Porks

Great post.

Market manipulation is here to stay and there is nothing we can do about it. We have to put it to the back of our minds in order to be able to prosper otherwise it serves as a handicap.