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     hershy
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Username: hershy
Post Number: 1923
Registered: 10-2002
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| | Sunday, February 11, 2007 - 10:35 am: |  
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In another thread Dug made the following comment:
Happy Trading.
ps-when are you going to bring Hershy to heel about all this Market Maker guff'n'paranoia
I responded in that thread but as Dog pointed out to me, the topic does merit it's own thread so I am reposting my reply:
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Dug,
Not paranoia.
I asked the little voices and they said it is definitely not paranoia.
Look Dug, how many different type of investors can you name ?
I know you can name instos so that's one.
The opposite of instos would be day traders so that's two.
Then you have the investors who read the financial results and buy for the long term so that's three.
Let's not forget the traders, that would be you and me Dug and most of us in this forum. Not Peter Loh, he's an investor. So we have four.
Well I'll name one that often comes up in some newsletters and forums; those we generally refer to as the "smart money" ! Let's call these five.
Let's see if we can come up with a few more and I throw this open to the forum.
So Dug, do you believe the market moves completely at random or is it a "chaos" movement, so unpredictable that it is predictable. Or do you believe that there are
forces at work that although unable to control the market (The Hunt Brothers and silver) can give it direction?
Or do you believe something else ?
You've often referred to mysterious trades that seem to stop a trend or at the very least slow it down. I think one conclusion was to allow those responsible to continue to accumulate at artificial levels. Why do you find it hard to accept that there are people who do this in most markets in heaven knows how many securities ?
Sometimes these mysterious forces are the instos, sometimes they are not. Sometimes they are referred to as the "smart money" at other times not. But they can influence the market so I believe they can be called market makers.
They have lots of money at their disposal and they can keep the price of shares down while they accumulate until such time that with supply at that level all gone, and mostly gone to their holdings, the price can only go one way and that's up. One way for this is a double bottom with the right leg just a ticks lower than the left. That will shake a lot of holders out and hey, presto, a nice bullish move follows.
Have a look at a gap on any chart. Almost any gap from the bottom of a consolidation zone to just above the top of the zone. Why, with such large overhead supply would the price move above this zone and what happens in such a case ? By gapping above a zone where many people are holding and would be willing to slowly buy or sell, all the possible sellers become holders hoping for higher profits and all new buyers arrive above the zone to buy into this latest bull run. And who do you think is slowly selling their holding now ? A neat way to eliminate resistance. .Those I call the market makers and those who will shortly bring this run to a close and start another move down. Such moves are not a natural occurrence, they are artificially induced by those who seek to control the direction or size of the market moves. The footprints they leave behind is shown in the volume.
What do you not like about this argument Dug ?
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I base my conclusions on an oft encountered niggly feeling that I was being taken advantage of when my contingency stops, pennies bellow support levels were being taken out on low pivots just before the start of bullish impulsive moves.
Then I watched a web presentation by Nick Radge and Toni Williams and his e-book "Master the markets" got a mention. I signed up for Nick's "The Chartist" and one of the benefits was a copy of this e-book. It deals mainly with what the authors calls "Value Spread Analysis". As most books it covers a lot of ground that I have already been over many times but when he gets to analysing the movements of volume in relation to the movement of prices the guy talks a lot of sense. I am slowly going through this book and I not yet ready to draw a final conclusion but I am finding a new direction in my stock analysis.
Not wanting to repeat myself I won't rehash what I have written above but will touch on one topic that Tony covers in this book.
Let's look at what starts bullish and bearish moves.
Above is a chart for CBH. The chart starts with an impulsive bullish move to around 50 cents where, if I remember correctly Dug was expressing disappointment at the failure of the bullish move. Instead CBH entered a consolidation or if you like an accumulation zone. This is where people stock up on goods from the bargain basement. As the supply dries out the offers get higher and higher but there is still quite a large holding that COULD get in the way of the "Smart money" or "Market makers" who are now ready to drive the price up and take some profits. They cannot do this if those who bough between 30 cents and 50 cents may now wish to take their profits and keep satisfying demand. One way to neutralise this supply is to force the price up and even gap it up promising bigger and better profits to those who hold on.
I refer to the first arrow, the one on the left side of the chart. A wide ranging bar with large volume pushes the prices to new highs. Two days later this is followed by a gap up and presto, somebody has ignited a bullish move that takes CBH to above 80 cents. Time to take profits and as the market makers/smart money have run out of stock.
The second arrow points to another low point pivot with above average volume and coincidentally, please not the NR4 candle that signals the start of the next move up. That NR4 is a signal to us poor traders with limited resources that a trend change may be under way.
the last arrow is very interesting. A gap down with only slightly higher than average volume NOT followed by capitulation would suggest that this move was not instigated by the market makers. Here I am sticking my neck out as I don't know enough about the topic but if not instigated by them I would assume they are not ready for a bearish corrective move and would not be surprised if CBH began to move upwards again. To ignite such a move manipulation with volume would be required. Very easy to do by drip feeding the market at ever increasing prices. Keep in mind that market makers/smart money/manipulators can be both buyers and sellers. They really have the bigger picture in mind.
Comments please.
"The safest way to double your money is to fold it over and put it back in your pocket."
http://members.optusnet.com.au/~hershy/
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dug
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Username: dug
Post Number: 2169
Registered: 07-2005
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| | Sunday, February 11, 2007 - 12:07 pm: |
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Hershy,
Just a quick note.
I'm glad you are taking a Text from the Australian Market.Too often US or UK action is taken as Gospel when they are completely different Systems/Markets to ours.
Example-The US has many more shorting opportunity shares and,from what I've read,does has a System of Huge Brokers being responsible for making the Market in individual shares.
As for the UK?well,the AIM market is much less regulated than ours.
I see our Nick is concentrating on the ASX 200 so these are probably the closest example to overseas shares we've got and probably his reading from overseas contexts can be applied to this segment of OZ Market.
I've got a few more points to make but I'll leave them to later.Hope others come to d'Table,Hershy.
cheers,
jr
tick [1] VWAP in the upcoming "Whata we Want" subscriber poll of additions to d'Value 4 $'s IC chart programme.
VWAP is d'Tool of Professionals,TRUE!!
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tryhay
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Username: tryhay
Post Number: 515
Registered: 09-2005
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| | Sunday, February 11, 2007 - 01:37 pm: |
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good point/s hershy & dug.
I suggest the answer is yes & yes to the thread's name: the 'market makers' are the fashion set who show which sectors are "where it is at" until the music stops... I suggest it is unreal to expect the hegemony (MM) not to suit themselves & their silver spoons in our society (for example wouldn't you if you could? ~ the temptation must be hard to resist). I guess the point is to out smart them if you can & ride along with them ~ always hard to do unless by 20/20 hindsight. I do not care if I sound paranoid - I'm saying it how you see it....Perhaps there is another valid thesis someone wants to post.....
The argument you make about the hard commodity share CBH is fine and if I was smarter I would have sold out completely rather than maintaining a holding for CGT reasons. The draft resistance support lines kept me in the trade ~ happy to maintain 10,000 shares for the long haul (will sell the other 10,000 when the price bounces back to >60c for a small loss - had already sold some for nice profit previously).
Daily chart : if CBH does not respect the 200DMA then 50c should pull it up IMO.
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dug
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Username: dug
Post Number: 2170
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| | Sunday, February 11, 2007 - 05:48 pm: |
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Now Hershy[and you tryhay perhaps in particular]need to show that the above CBH chart actually confirms Hershy's "mutterings" by confirming that the illustrated moves are not reactions to News or shock horror FA is involved!I'm saying that a lot of hindsight/curve fitting is the basis of that post.
Now I know Hershy you like to support the Anti FA,TA one and only,Line but BUT if you want to go into the Reasoning of Market Makers[=Instos and Investment Funds]one must have at least some gist happening of Fundamental Analysis no matter how Sour nix Sweet you think that may be!
Instead of thinking/postulating that BigBoys manipulate prices[SHAME!!]one has to follow say the Simple FA principle that one Buys when prices of a particular share are Lower than your FA calculated Value and shares are Sold when their price exceeds that calculated figure.
There is an unfortunate tendency to think that FA is only really to do with Loooong Term,years of Holding and in reality it's NOT.
There is also a tendency to think of Institutions etc as Long Term Holders when in reality They're NOT.
BigBoys TRADE.Get it thru ya naive skull,THEY TRADE.
What's more THEY're Better at it than YOU!
Why?[Que?] because THEY aren't "hampered" by it being THEIR OWN MONEY!!
Have you heard[or remembered] my Substantial Holder Notice RAVE,Hershy?
How Sub Holders who maintain above a 5% Holding can TRADE up to 2% of the Whole Shares on Issue without having to put a notice in of a Change?
Of course Anyone can hold up to 4.9999recurringof the Shares Issued,buy sell manouvre it AnyWAY they like without having to put a Notice in about it.
One can also set up seperate Entities that are Arms Length to circumvent most/any/all Regulation.
THEY are just doing Business,THEY are Free to do it!
and if you don't know what 4.99999% or even 2% of the Issued Shares IS in your company?well?
Ignorance ain't Bliss.Ignorance is No EXCUSE!!Such info is the BASIS of Volume Analysis.
I become disgruntled,perhaps I'm raving so...
cheers for now,
jr
tick [1] VWAP in the upcoming "Whata we Want" subscriber poll of additions to d'Value 4 $'s IC chart programme.
VWAP is d'Tool of Professionals,TRUE!!
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dug
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Username: dug
Post Number: 2173
Registered: 07-2005
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| | Monday, February 12, 2007 - 12:12 pm: |
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Staying with CBH specifically,there were many fundamental FActs happening during this chart period.
From August[and before]there was a takeover of Traiko by mainly a script offer.
Big Holders in both would have been "rebalancing",Holders in Traiko alone would have put selling pressure on when they actually got their CBH script.Especially when such holders were looking at a further 50% on the original CBH offer for Traiko[which valued CBH~47 cents from memory]
So you see there was Legitimate Selling Pressure on this Market.
What was bolstering Buying?
Takeover rumours and some [not here]chat room piffle of CBH is for a $1 more.Zinc is HUGE! CBH has Broken Hill in it's name so it Could be a future BHP!!blah,etc.
Really Hershy,I wonder if any study by "Professionals" a la our Nick have actually taken Forums and Chat into account?
Probably not,they're all to busy regurgitating yesterday's infomation about d'evils of chat and how they're gunner tell you about d'machinations of Smart Money/Market Makers et al.Sells more Books,Gets pilgrims to take their Courses.Telling them about Share Market Mechanics,dry and provable won't sell books nearly as much.
Anyway,awaiting your synopsis,Hershy of d'next chapter.
cheers,
jr
tick [1] VWAP in the upcoming "Whata we Want" subscriber poll of additions to d'Value 4 $'s IC chart programme.
VWAP is d'Tool of Professionals,TRUE!!
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dug
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Username: dug
Post Number: 2225
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| | Tuesday, February 20, 2007 - 08:00 pm: |
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Ya EVER gonna post here again,Hershy?
or are ya restin' onya Laurels after seein cc off onto Hot Copper?
should have put d'coot into annie's hard money.
he'd get a long,
be a bitter colour to dem
HardCases,wid NO Money,Yanks!!
wotcha rec?
tick [1] VWAP in the upcoming "Whata we Want" subscriber poll of additions to d'Value 4 $'s IC chart programme.
VWAP is d'Tool of Professionals,TRUE!!
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hershy
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Username: hershy
Post Number: 1934
Registered: 10-2002
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| | Tuesday, February 20, 2007 - 08:16 pm: |
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Hey Dug,
Thanks for the "hurry up". I di intend to post but I am just a bit short of time as it is Bass time. You gave me a hard task Duggie. I thought I found the prefect example for you but then I looked for news events and found they correlated with price movements. I do not want to use examples mentioned in the book so I will continue to seek the perfect "i.e."
One thing I have gleaned from the book is that high volume narrow ranges are usually, not always but usually market manipulations. Just think of it this way: There are sellers pumping stock onto the market. The MMs are buying everything that hits the market and choke the price movement. Why ? Why the effort ? Why not let the price find it's level ? You answer that Duggie. OK ?
But for now, have a look the the IVGN thread in the US markets. You'll probably think it a load of garbage.
As for seeing the skipper off to HC, I ain't proud of that. I would rather he managed his aggression. He's put a lot of himself into this forum. Not the calibre of Spider or Snifter but he has a lot of fans. Face to face the old coot is quite acceptable. He is suffering from the internet keyboard syndrome. You cannot see the other side so you can lash out.
Some of us do not grow old gracefully. Yeah, me too !
"The safest way to double your money is to fold it over and put it back in your pocket."
http://members.optusnet.com.au/~hershy/
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dug
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Username: dug
Post Number: 2226
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| | Tuesday, February 20, 2007 - 08:38 pm: |
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Re BigVol small range.
Most often one will find a single BIG Trannie[transAction]inflating the Volume.These can just be Book Entries,a mere shuffle BUT
that's why we gotta clean up Data.
One only can Find these trannies on the Day,by d'next?
the data is Gone!Withdrawn and sitting there all concealed for a Pilgrim to only wonder about.
Bill's on i'm off.
tick [1] VWAP in the upcoming "Whata we Want" subscriber poll of additions to d'Value 4 $'s IC chart programme.
VWAP is d'Tool of Professionals,TRUE!!
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dug
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Username: dug
Post Number: 2247
Registered: 07-2005
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| | Sunday, February 25, 2007 - 10:49 am: |
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Hershy,
You told me elsewhere that you're looking for examples of Chart Action that can be seen as Pure Market Makers and not related to News.You're having trouble doing so
BUT
You are trying to confirm our Nick Radge,who sold you this idea/concept.
So wouldn't it be necessary to go thru the Charts of Nick and use them to illustrate that it was Mark Makers and not News?
Those were the charts that persuaded you so they are the ones to check to ensure ya weren't sold a Pup!
I still think Institutions Buying a Price Range and adjusting by Stopping Buying and Selling a "Surplus" at measly percent profit could be what ya lookin at.Concept wouldn't sell courses tho,hey?.
Arbitrage Hershy.d'BigBoys can justify the most pathetic percent of gain as their day's work.
cheers,
jr
tick [1] VWAP in the upcoming "Whata we Want" subscriber poll of additions to d'Value 4 $'s IC chart programme.
VWAP is d'Tool of Professionals,TRUE!!
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hershy
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Username: hershy
Post Number: 1948
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| | Sunday, February 25, 2007 - 11:11 am: |
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TCL - Transurban.
In a nicely sustained bullish trend with dips and peaks but fairly stable since may last year. If you take out the bubble you can trace it back to October 05. Only if you are an investor. A trader would have quit being long TCL shortly after 10.05.
Lets fast forward to the present time. SRG is being absorbed
and a good result is released to the market. What happens ?
The day before the report in the morning there is a shortage of stock so the price moves up, as one would expect in anticipation of a good result. But by the afternoon the volume of sales increases and as more stock is being offered than asked for, the price moves down and closes pretty low on the daily range. Not a pretty candle if you are a bull, the day certainly won by the sellers. Next day, the market is flooded by sellers and they win the day hands down with barely a token resistance at the bottom reached of the daily range. Next day the buyers clean up. Almost identical range to the previous day and someone is accumulating till close to the top of the range the selling pressure again pushes the price back down but the close is a strong one. and yet again the following day the selling pressure is too great and the buyers are overwhelmed.
In this skirmish I got caught twice, both times at the top of the day's range only to be stopped out at lowest tick for the day. I have been setting my contingency stops - which you Dug don't like (and I am beginning to dislike too) around pretty visible lines and I have been picked off by concerted fishing expeditions by forces that are playing with the market. TCL want to go up as the diamond pattern now being formed would indicate.
Can I prove this Dug ?
No, I cannot but should TCL move up as I expect it will, I will more convinced than ever that MMs ARE manipulating the movement of shares. This is not illegal, it is just one extra hazard that us minnows face when we go out to sea and swim with the sharks.
This is not a conspiracy theory to find an excuse why I lost over $2000 in 3 days. It is just part of the business I am in but I do find it much too coincidental that my entries and exits set along levels that have been suggested by gurus - and widely distributed and followed I guess were actual turning points in TCL footsteps.
"The safest way to double your money is to fold it over and put it back in your pocket."
http://members.optusnet.com.au/~hershy/
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hershy
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Username: hershy
Post Number: 1949
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| | Sunday, February 25, 2007 - 11:33 am: |
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We're playing Forum ping pong Dug. Our replies to each other went at the same time.
No, it was not Nick that got me to believe that there are MMs who can and do put obstacles in the path of least resistance. It was Nick who got me into looking at Elliot Waves seriously.
The MM theory comes from Tom Williams in his book "Master the Markets".
Again I disagree with your views on how the Big boys trade.
I do not see them accepting 1/2% moves. I look upon them as antique dealers who go in search of cheap goods to sell at highly marked up prices. and they are not afraid to take advantage of anyone that has "stuff" to sell.
"The safest way to double your money is to fold it over and put it back in your pocket."
http://members.optusnet.com.au/~hershy/
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dug
Member
Username: dug
Post Number: 2248
Registered: 07-2005 | |
