RE: S/P manipulationHey everyone,
Let me divulge a possible scenario that may help u trade this stock for the near future. Suppose a group of wealthy investors wanted in on this stock but were not ready to commit there large position dollars yet but also didn't want it running up leading to drilling and even during drilling. BUT how could u prevent this u ask let me explain. If we started at the high point which was @2.40 we could assume $2 was the stop loss for alot of traders. So we begin by shorting the stock in the low 2's forcing it gradually under 2 by afternoon and the stop losses take it down. Then just before the end of the day we drop an iceberg sell order on the market and implode the stock. Since they are the only ones expecting it then it would make sense to short it to themselves thus getting the 500,000 shares back instantly and replacing them. But then the share price closes at that extremely low price. Does last monday come to mind? Now they only have to cover the shorts they sold above $2 to start the whole process. Easily done the next morning on the steady climb back up. Since a short has to cover 50% of the the trade then for $1 he shorts SLI just above $2 and then buys it back on the way back up the next morning at lets say an average of $1.50 as he would be the most willing to dive back in right away as he knows whats going on. So a 50 cent (50%) profit in one day on however many shares shorted and the stock now has a new ceiling of $2. Should the stock start to push hard on that new ceiling we hit the stock again with a big sell order in the morning and then buy back again under the same scenario but we do all this in a much faster time span and on a much smaller scale as the SLI investors are already spooked from a week ago. Does todays action sound somewhat familiar? Once again a new ceiling has been placed on the stock and each time the stock closes about 10-15% lower. I believe this group will keep hitting this stock over the next few weeks until they have it nailed down to a narrow trading range they like, I think somewhere in the $1.20-1.50 range. The one way that we as the small retail investors can fight back is to have in place stink bids with no expiry date that are 30 -40% lower than the prevailing price. Thus when they hit the markets with these "bomb" short sells our stink bids will take them out without them getting them back. If we stay strong on the bounce they will be forced to cover at a loss and will cease putting a collar on the share price. The stink bids will put a high "floor" under the share price and prevent people from panicking and selling out and will also prevent alot of stop losses from being triggered. As of today i have a no expiry bid in (will not say exact price) that will snare alot of these short bomb shares at a nice discount should they continue these games with my favorite gold stock. Its up to them but if they keep trying then they will hand me alot of cheaper SLI shares and i will only be grateful for their arrogance and hubris. To all the true believers long and strong for 2010 and can't wait for that first set of drill results! All the best
Longrider