I can agree with you on the negative sentiment, but not on the reaction of the SOX. I also believe the pscyhological tone of the Market is somewhat controlled by the Power Players. That's the point you're missing.
I agree that this is a much more subtle type of influence but I believe that powerful groups can help create the sentiment that drives the market in the direction they want to have it go.
"All news organiztions are corporations and do but reflect their management's views. Corporations that own media have specialists influencing the choice of management. Newspapers, magazines, and television are but extensions of the corporate world." "When Richard Ney's first book, The Wall Street Jungle, came out it was on the New York Times best seller list for 11 months. Yet the New York Times would not review it. The Wall Street Journal refused to take an ad from a New York bookstore that featured The Wall Street Jungle (2Ney, 30)."
If this is even partly true, it would certainly at least partially explain why the reaction of May 8th can take place, where some stocks went up 25-30% in one day. By creating a "doom and gloom" scenario in the face of good news, they helped drive stocks like BEAS to $8+, and others way down, which made the one day call action very profitable.
Like I said, there was a noticeable increase in call buying on the QQQ's, CSCO, etc. Some options went up 1200% in 24 hours, mainly because they had gotten so cheap.
So, again, this is not the bold manipulation like price fixing or misleading analyst comments, but it's out there, I believe. |
