"When God throws ... The dice are loaded!"
I have been around the markets for more time that I do care to remember and I have seen some really "incredible games" played by market makers, brokers, traders and many other individuals and or various groups!
In fact the "big players" have been charged and paid huge fines many times for stock market manipulation, so please don't delude yourself into thinking that everything that goes on in the markets is what it really looks like!
For example, on the Eve of Christmas in December of 1997, when all was quiet on Wall Street, Nasdaq market makers quietly agreed to pay a $1 billion fine to settle a class action suite that investors brought against them.
The charges were ugly. "Collusion," "gouging," "extortion," you name it!
If it sounded like the charges were befit a two-bit mobster, they were in there.
That's what they were, by their own admission!
Many times you will feel that the market will pull the rug out from under you. For example, when certain stocks are really hot and they are gaining 8% or 12% a day, do you realize how many people see that and figure ...
"I'll just buy into these stocks and make a fortune?"
Well, guess what?
The market makes its money by taking yours! And whenever something gets into too much of a pattern, the market will reverse course.
Several market moves are very often manipulated and orchestrated:
It's amazing that a certain stock or a whole sector can be on fire and everyone wants in, yet the "waves of sells" hit that stock or sector at the exact same moment and ...
Down it goes in flames!
Did hundreds of individuals all at once decided to take their profits?
I think not folks!
This is the more sinister side of the market and although you won't find any paper trail or "proof," the fact is that "wholesale moves" are quite often ... planned.
Can you figure out why the banks fell like rocks and low-caps started flying?
Did all those fund managers come upon the same idea at exactly the same day?
So, what do we do when it appears that certain moves can be "instituted?"
We can anticipate and we can out guess them!
For instance we know that nothing goes straight up. Right? Well when you get a nice run up for a couple of days, you have to start thinking about taking your money home because selling will hit in a big way.
Playing the market is somewhat like driving defensively. You always have to be ready to anticipate what the other driver will do.
You have to anticipate what the market is going to do and stay with the trends.
If the market runs a sector, you will run with it, but you will also be waiting for the turn and be very fast to bail out.
If the big players want to take cash out of i.e. bank stocks and buy into another sector's stocks you have to have a good idea of that sector's stock before all the money gets there.
Often all it takes for a major reversal is for a few fund managers to see that a competing manager is selling a portion of his portfolio and ... boom!
They are all selling for all they're worth. Why? They don't really know! But maybe "HE" knows something!
So whenever you get to see something that moves too much ...
Get ready for the inevitable downgrade!
When a great company is on fire ...
Watch for the "overvaluation" call to come!
When money is being made in fistfuls, get ready for the wholesale sell off. Be prepared with your stop loss orders in place. Be quick to take your profits.
To beat them at this game you definitely need an edge and the edge is to always be prepared for their next move!
A lot of people don't understand the games that are played and have taken big and sudden losses. Ever wonder why conventional thinking says, "Invest for the long term and ignore the daily ups and downs?"
It is because the market as a whole has been and will keep going up!
But along the way market makers and institutions will be making their upgrades and downgrades, and taking money from traders who don"t know how the game is played!
You can "play this game" and win, but you must learn what to look for!
So understand that short-term holds can produce great profits, but it won't be easy, as the market will indeed try its best to take your money ...
Don't let them!