When I was first reading about stocks, trying to learn the game, they taught me how to spot manipulation and insider trading. They would show me something that looks like this pre-market picture:
Note the thousands of contracts sitting on the bid, since the market essentially ran out of sellers and the market went limit-up. hmm…. now look at the volume splitter on the pre-market chart:
The last bar shows a huge pre-market surge of buying. That is what we call “unusual pre-market activity” in the biz. It’s a sign that the market playing field isn’t very level at the moment.
I wonder who could be behind such unusual stuff, manipulating the way our markets work? Oh, it’s the freaking government. Damn. Now what?
“When I said [short sellers] were sticking their faces into a buzz saw I had no idea the federal government would be the one holding the saw.”
Well put! This is ridiculous.
Everyone on earth is talking about the new rules, and I don’t care to add to the cacophany. I don’t really find it that interesting, except when it affects my own trading. So, I thought I’d show what I was looking at this morning… I have time to post, because I won’t be trading until I see how this initially shakes out. Be careful, out there.
September 19th, 2008 at 11:55 am
I knew it. It was the short sellers causing the market collapse ;)
September 19th, 2008 at 4:47 pm
I found golds reaction through all this entertaining.
September 19th, 2008 at 8:38 pm
Good post Rich….the visual effect of seeing it on the chart makes it much clearer.
September 21st, 2008 at 9:41 am
I was watching that and scratching my head a bit, then I saw the 12 point bounce at the open. I figured it was just traders taking advantage of shorts that don’t cover until the market opens…a number of automated trading systems fall into that category. It was obviously a very profitable scalp for those that did it.