What does it mean to manipulate price (assuming any such manipulation exists)? If the FED makes a practice of intervening to stabilize price to affect mass psychology, is that not a form of price manipulation?
Define manipulation. It can't be done. You try to manipulate the market every time you trade, or do you?
If you believe that the FED has intervened, or is still doing so, is it not possible that without such intervention the "herd" would have driven the market much lower in October instead of suddenly reversing direction?,
FED has never intervened in the stock market. If you think to the contrary, what's your evidence, because it is you who is making the assertion that they are. Otherwise, one needs Occam's Razor, else, one can allege the Martians are manipulating the market.
If traders were making purely random decisions it is highly unlikely the market would have moved as high in such little time as it did off the October lows, or that the reversal would have been so abrupt.
Random action doesn't preclude the existence of the theory of runs. When the shorts run the shorts, the resulting action runs. Why didn't you take advantage of such an obvious development if you thought the action was causal as would be the case when a causal agent like the alleged PPT was involved?
Such movement happens when something turns the herd in a new direction,
You are the source of the herd.
All that is needed is to hold the line when things appear to be weakening to keep the herd running in the "right" direction.
Have you considered that a lack of selling accomplishes the same outcome? Such a lack creates a short term base from which further short covering and new buying starts.
Unless you are that entity or part of that group (if indeed it exists) you could never PROVE that the market is being steered in one direction, but you might very well see a series of market events that suggest such action is being taken.
Why are you operating in markets? In order to make a moral statement? If you can see such a series, you should put it to your advantage. The trouble is, you can't. You can't because it isn't possible to see such a series while it is forming, and that is due to the fact that it isn't causal. Your comment is a posteriori and motivated by other reasons.
If, over time, there is an observed correlation between overnight action in the futures markets and yet to be released news, or other sudden flurries of buying at points where price can be moved with relatively little volume, why would I not conclude that somebody is more interested in moving the market higher than they are in acquiring an equity interest at the lowest possible price?
Because there is no such correlation. If there was, you'd be using it to make money as would everyone else. The attempt to do that would neutralized the causality. Haven't you figured out yet why markets are random?
Nobody would call it the PlungeProtectionTeam if it was trying to drive the market lower, but if you recall the FED concern about the "wealth effect" leading into the top of the "bubble", the possibility of intervention to stimulate a correction hardly seems remote.
Isn't financial leadership a reasonable quantity? If trouble is developing, isn't it the responsibility of some to assert that? Sure are a lot letter writers who believe so.
Unfortunately, that change in direction, however it happened, took the herd too close to edge of the cliff, and there are now a lot of badly injured cows laying in the canyon. The cost to society for cleaning up that mess over the next few decades is going to be staggering.
The cost is zero. What was gained was all paper or do you believe in bubbles?
Why should I believe nobody is intervening to try to keep the rest of the herd from going over?
So you don't go over? |
