What I write is my theory on what I have seen during my years of trading. The Shorts 1st off when I talk about shorts I am not talking about individual traders like us on Stockaholics. I am talking about the big boys, Hedge funds, Institutions and such. It is my belief that there is a network of select short entities that work together to some degree. Some of the analyst's and websites are in their back pocket to write what ever they want (I am sure on this part) Some times there is no rhyme or reason for a stock taking a big drop in price. Many times the website articles and analyst are totally off base on their analogy of a stock. In 2009 they came out with an article that there were ladies of the evening on one of the floors of a LVS casino in Macau. Hardly worth a stock dropping but sometimes they insult the intelligence of traders. The shorts don't really need a reason to push a stock down as the average joe is not going to make a big difference in the scheme of things. I would not be surprised if one hedge-fund calls another and says: ok, were going to short XYZ. John Smith will come out with slam article near the EOD long after we get the best prices. Then when the buyers come in and the shorts cover. Many times this happens when a stock becomes overbought when the shorting starts, and the other big boys start taking their profit. A stock dropping from the overbought level is normal, The Longs Many or the Hedge funds and Institutions are in it for the long haul and have seen the above many times over and take it with a grain of salt or pick up more shares if the drop is steep enough. As long as the fundamentals and growth are strong they will not let loose of their shares. Much of what I wrote about the shorts can apply to the longs but not to the same degree. What takes place is illegal and why the SEC does not put a stop to it is beyond me. It has been going on for years. On the other hand a trader can use the above to their advantage.
I couldn't have said it better myself ... nice info TTT special for the less experiences one IMO the all markets banks are manipulating the money-finance world I could tell few story as well that I live in but
see this thread regarding manipulation http://stockaholics.net/threads/the-deadly-art-of-stock-manipulation.2089/
here is an interesting BP's article taken from his blog (I got permission) B.P. RISING The Rise of fraud on wall street 11/18/2015 The internet has allowed for global access to potential Wall Street related fraud. Investors and traders are connected like never before and word travels fast. But, how accurate is the information you are receiving? Traders are so quick to act on large volume and news that they rarely read through the material carefully. Then when a stock goes against them, that is when they decide to do their due diligence. Data on a company can get out so fast it is hard to fathom. A kid sitting at his computer in China can create a false Twitter account and post something that can send a stock tumbling immediately. Companies abroad in places like China have it even easier as they are not adhered by the restrictions of the United States and are almost immune to prosecution. Websites such as Twitter have given these people a huge potential platform for this type of behavior. Where is the SEC in all of this? Who knows! The rise of fake landing pages and imitated Twitter accounts are costing investors billions of dollars. "Short and distorts" and "pump and dumps" are rampant and the SEC has recently decided to crack down on these fraudulent Twitter posts. Chinese low float stocks like BNSO andEFUT (which in my opinion are outright frauds) are the perfect target for price manipulation. These companies shouldn't even be allowed to trade on Nasdaq, but rather belong on the OTC Market. These stock exchanges need to do a better job of vetting these companies so they can help protect investors alike. Bonso Electronics BNSO recently ran over 100% on earnings and then faded quickly leaving retail traders holding the bag. The company sells kitchen and bathroom scales. BNSO's website also looks like something a kid put together. The copyright date at the bottom of the website still says 2013 (http://www.bonso.com/en/). Efuture Information Technology EFUT has run about 50% in the last five days on high volume with absolutely no news to speak of. They have an earnings report coming this Friday afternoon which will most likely be less than impressive. If you watch the bid and ask carefully you can see 50k and 100k bids appear, disappear and then reappear. This is most likely an attempt to hold this stock up as a large bid makes the stock appear to be bullish. Along with this tactic, you could see multiple and consistent single share buys which help manipulate price (price just reflects the last trade regardless of the number of shares). There is no way to know if it is the company itself engaging in this activity or some outside firm. Either way, the entire thing is extremely suspect. Most likely this is done by a hedge fund or brokerage firm manipulating the price and attempting to create a false market for the stock. They keep the stock up by controlling the majority of the shares, not allowing any selling, and they continue to buy. When the dumping begins a flood of shares hit the market and then supply and demand take over. The stock crashes and retail traders get crushed. Moreover, these supposed earnings of both companies are unaudited and out of Beijing, and Hong Kong, China. It's time for the U.S. and the SEC to wake up to these scams and start to crack down for the good of the U.S. retail trader. B.P. Rising Research will be doing an independent investigation to find out more information on these companies. Most retail traders work very hard for their money and are just looking to earn extra cash to take care of their families. Unfortunately, they are treated like puppets by the big banks, hedge funds, brokerage firms, stock promoters, and scam artists domestically and abroad. It's time for us to utilize the power of information and technology to inform each other and retaliate against those looking to take advantage. My recommendation is that it's probably best to avoid Chinese stocks completely. You should especially stay away from the low floaters that are thinly traded and easy to manipulate. I recently set a price target of $1.15 on BNSOand it's just about there. The EFUT price manipulated pump and dump will likely falter when their actual earnings are released. The following are ways to avoid falling into this trap: Read all press releases meticulously, watch out for inexplicable price action or volume, avoid thinly traded low float stocks, and be weary of any company based outside of the U.S. especially China. Watch for suspicious market maker activity such as fake bid and asks, be weary of Twitter pumping and distorting, misleading or false PR's, unaudited earnings, and forward looking statements. Another recent example of suspect dealings is the low float stock KBIO which was supposedly liquidating its assets and winding down operations as of November 13th. Less than a week later, a large stock purchase is announced. Today the company has announced a purchase of 1.2 million shares by Turing Pharmaceuticals CEO Martin Shkreli (the same guy who decided to charge $750 for one tablet of Daraprim). The stock has run from $2 to almost $20 after hours. It has probably destroyed many investors who sold their broken shares to Mr. Shkreli between 60 cents and $2.43. Do you think KaloBios Pharmaceuticals was not aware that this transaction was going to take place? I'll let you decide. This entire game is rigged for the insiders my friends. However, as a retail trader, you can certainly make a lot of money if you are on the right side of this racket. Educate yourselves on the prevalent scams that exist, cease being naive and gullible, and use this information to grow your account. Please my fellow traders tread carefully and always do your due diligence. Fraud is on the rise and it will likely only continue to get worse.
Speaking of story's: In regards to seekingalpha.com, anyone can write up an article there. It's almost like a penny stock forum with bashers and pumpers only a little more sophisticated. This does not mean that good information does not come from there but too many times the info is taken out of context. I responded to a few negative articles when AMD was in the $3. I explained they were leaving out this and that but to no avail. They even deleted one or two of my posts. They author's ignored my other responses when some of the other members liked my responses. We'll egg on their face now. The same goes for motleyfool. They root for who they are vested in or controlled by.
I couldn't agree more TTT ... we say >>>many of those it is better to lose than to find them I just read between the lines and I ride (trade) their waves but get out before them why going to read seekingalpha when we are much better here anyway whoever follow your stocks must be crazy to go to seekingalpha when you give so many tips -info-honest opinions here.... you nearly convince me to swing trade .... that is a big compliment
