I'm thinking the gap this am got many to buy and gave the big money an opportunity to get short so they could drive the market down this afternoon and buy the shares cheaper so they could drive the market up etc etc
This I saw today and it struck me that many still believe in the tone of conspiracy theories about how markets work. I offered the following answer:
Let's take these thoughts and look at it in a different way..If you accept it, great..if not..I don't expect everyone to agree with me anyway.
Retail buying normally is last to the party...what we saw this morning could have very well been retail buyers buying the gaps.
In this fashion, institutional traders were selling them all they wanted as institutions were selling inventory accumulated from last week. Without institutional support at higher levels...not so much shorting, stocks begin to fall
they may be shorting, but I'd look at it as "not supporting stock prices" meaning not willing to buy.
Retail traders get frustrated they bought gap highs no real support from heavy traders with deep pockets retail selling hits,profit taking hits,shorts probably enter too etc, but this is how the market works.
I'd rather we look at the market for what it is. The pros know how to play the game and know how it's played.
It's up to us to play with them i.e., not buying high gaps, waiting for ranges, finding trends, if things are sloppy, stay out, etc. Again, if this strikes a chord, great, if not..I won't whimper :)
Next thing I saw and this often seems so true, but in reality is much different:
Do institutions really act together, knowingly? Or do they just happen to think alike (the majority anyway)?
Threei gave the answer:
They are in competition with each other to a way bigger extend than they are in agreement. GSCO couldn't care less if MLCO makes money.
It was an interesting discussion in how traders often look at things at face value, not realizing reality of situations by going deeper into it.
Normally talks and tones of conspiracies, the market works together to screw the little guy, etc. do nothing to help the trader through his or her learning phase. I'd opt to get rid of these thoughts altogether.
Respectfully,
Chris |
