Market Curiosity: Exploring Markets And Systems

January 15, 2011

On the silver market and manipulation

Filed under: Editorials — Tags: , , — Jeff Fitzmyers @ 11:47 am

Consider that, if possible, all markets are manipulated and the charts include this information. Almost everyone wants to buy stuff at relatively low prices and sell stuff at relatively high prices. Those with few resources can only trade at the bid and ask. Those with large resources have “pricing power” and actually have to manage it. If someone has a chunk of stock to sell and dumps it at market, that stock could easily go down a lot and then recover quickly. This creates:
– A lower return for the seller.
– Annoys those with tight stops who get stopped out, watch the stock rise right back up to where it was, and then complain to “authorities”.
– Gives a good deal to those who know the fundamentals of the stock and see it momentarily on sale and buy with both hands.

Or the stock could be sold more slowly and create:
– A higher return for the seller.
– Not bother those with tight stops who then don’t bother the “authorities”.
– Keep those waiting for a significant pullback waiting.

In stock and futures markets this is ubiquitous, yet is labeled “illegal” for various distracting and lame reasons. Jesse Livermore’s book was titled Reminiscences of a Stock OPERATOR for a reason. If I recall, part of what he did is help get people out of large positions of stock at the best price — for them — possible. Mr. Livermore would get ~10%(?) of the stock so it was in his best interest to “manipulate” price. Aka: operate.

There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.

As far as I can tell the price of anything is a derivative of the collective consciousness regarding that thing. Right now people don’t care about silver and that is reflected in the charts. And when people start to revalue silver that will be in the charts too.

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