Therma Bright Inc V.THRM

Market Manipulators

[goforit59]

Be aware guys. Hold on to your shares. This will soon explode

https://www.quora.com/Why-do-many-market-manipulators-make-the-price-of-stock-go-down-instead-of-up

 

Why do many market manipulators make the price of stock go down instead of up?

 

 

 

 

 

 

 

 

 

 

 

 

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5 Answers

 

David Mitchell, Futures trader, software guy, blundering through life

Answered Feb 21, 2015

 

 

Market manipulators make the price of stock go down for exactly one reason: they want to be able to buy large amounts of it.

If a market manipulator starts buying large amounts straight away, their buying will move the stock price higher - that's not a good outcome, as by the time they've bought all the stock they wanted to buy, the price could have gone appreciably higher and the profit they were hoping to make has disappeared before they finished buying.  That isn't what they want to happen; they want to buy it as cheaply as possible. 

To do this, they will often sell some first to try to achieve several different outcomes. Consider this:

• if the manipulator sells significant quantities of a stock and the price goes down, then other players will be spooked and will start to sell their stock as well. The manipulator can try to quietly buy back this stock without being noticed, and without pushing the price back up again
• if the manipulator sells significant quantities of a stock (let's say 100,000 Apple shares) and the price DOESN'T go down, then that means someone else out there must be buying similar amounts of stock as it comes onto the market. Now that buyer won't be someone like you or I - we don't buy 100,000 Apple shares at market. It HAS to be another market manipulator. That's an important piece of information for the first manipulator to have - "some other big player wants this stock, so prices are likely to go higher..."
• as the price of a stock starts to move higher (as the first manipulator keeps buying it, supply will start to become less, so the price will inevitably start to rise), you often find the manipulator then starts selling again. Why? Two reasons:
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1. He wants to know if the other manipulators out there are still interested in buying the stock. If so, then the price shouldn't fall by much; the other manipulators will be buying up the stock that the 1st manipulator is selling. That's what the 1st manipulator wants to see happening; he needs other big players to help drive prices higher, as otherwise there will be no-one for him to sell to later on
2. The manipulator also wants to know if there's other unsophisticated stock holders out there who are on the point of selling, who could be convinced to sell if the price starts going down again. Price moves down; those unsophisticated stock owners sell their stock; manipulator gets to buy them without moving the market, and at a cheaper price than if the market had kept moving up. Once the manipulator has consumed all the supply of stock out there, anyone who wants to buy can only buy from the manipulator, who can then start to raise the price

You'll notice that I mentioned Apple (AAPL); that was just a stock I nominated at random, and I don't follow it or trade it. That said, let's look at what happened around the last low for AAPL in mid-2013

Price is shown on the top, volume is shown on the bottom. I've marked a few key dates with letters

At day A, the volume is high and the price is moving strongly down. Here we've got manipulators selling lots of stock to test the market, but not enough people are buying it. Over the next few days, volume is still high, but the price falls at a much lower rate - that means someone has started buying it.

At B, the price has moved up appreciably, but notice that the volume is dropping off. That means that less (including the manipulator/s) are interested in buying at that price. However, the volume being low indicates that whoever bought all that stock back at A is still holding on to it; they're not prepared to sell even though the price has gone several dollars higher.

At C, we've had a bit of a move down, but volume has increased significantly on this day yet the price has turned and closed up at the end of this day. That tells us that someone is absorbing all the stock that's being sold.

At D, the price is slowly edging down, but the volume is very low. That's not manipulators selling; the volume is too low. It has to be small players selling off because they think the price is headed lower. That's what the manipulators like to see, as they can buy the stock being sold as it comes onto the market without moving the price upward.

At E, we've got volume kicking in again so the manipulators have to be involved. Note how, on that day, the price gaps down at the open, then closes near the high: there would've been a bunch of small players spooked into selling after seeing that open price, and their stock was being bought by the manipulators. Note also that the low price at E is just a bit higher than the low price at A - the manipulators have clearly decided that's a good price to be buying, so they're not prepared to let the price go lower. Whoever thought AAPL was a good buy at A clearly still thinks it's a good buy.

At F, the manipulators are selling a bit, pushing the price down to see if there's any more potential sellers in the market who they can spook into selling their stock. Volume is low, which means the supply from non-manipulators has dried up - that's the final piece of the puzzle in place from the manipulators' perspective. They now hold all the stock that's in play, so they can start to drive prices higher again

Coming in to G and the next few days, the volume dries up and the market edges down again. Once more the volume is low, which means the supply of stock still isn't there

Finally at H, there's a huge gap up and the volume is high. We've already seen there's no more sellers and everybody suddenly wants to buy now, so prices are destined to go higher (which they did)