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Strategies & Market Trends : Free Float Trading/ Portfolio Development/ Index Stategies
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From: dvdw©4/11/2007 12:23:45 PM
of 3821
 
Only 14% and 19% of an average days trade at this mornings collection point....there is no valuation going on, there is just price maintenance with the focus being on the bottom line of every organic portfolio. Imbedded inertia forces trade elements to remit supply, in the maintaining price direction. Truth is; investors are not buying into the scheme and are withholding supply from participation, its as if a new awareness of the scheme is being shown by investors that prices are not at bubble valuations and are not even being subject to normal market forces.

This market is locked up, rubiks plans and schemes are being adjudicated against know forward demand dynamics and the resultant trend is the absence of participation.

For months the mutual fund industry has been sidelined by the idea that loaning inventory is a profitable way to stay in the game without taking on new risk. While the hedge funds appreciate this additional supply to sustain the inertia installed, its becoming obvious to anyone with better eyes that accumulated deficits are not being resolved. The lack of resolution to long standing inertia speaks to the shrinking float of the entire market.

Only under a regime of disconnected Supply and Demand can the present situation be sustained. Systemic intent is the prevailing metric i.e. reduced to price range maintenance.

Broker dealer trading departments are another source of price obfuscation, there needs to be a wholesale awareness of the tactics being used within that realm, over the last several years in the sideways trending market, the broker dealers were paid a disproportionate amount of their earned profits by hedge funds, for utilizing investor inventory, the loaned inventory kept investor balances in maintenance mode.
Two issues emerge from this;
1. Without investor inventory, those profits could not have been made.
2. Broker dealer complexes have breached thier fiduciary duty to thier customers, by persistent activity designed to sustain thier own profitability, by fomenting inertia within "first" client accounts.

Real reform of the imbedded complex is required, supply and demand remain, the only true metric for valuation.

All floats are relative constants. Only under disconnected supply and demand could this market have arrived where it is.

Its pure cartoon.
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