Can market makers really manipulate prices contrary to real supply/demand

[beefcaketrade]

I've read that in the old days, market makers or floor specialists can artificially quote prices and move trading towards a direction that is contrary to the real supply and demand based on the order flow that they see.

For example, if there is a buy order of 100M shares, and the MM only olds 20M, one strategy will be to "shake people out" so they start quoting prices lower and lower to cause panic so they can buy shares and fill the order.

Is that true?

If so, how long of a duration is this manipulation normally? Are they intraday stuff, or can they drag on for days, weeks, or months on end?

So skip to now, where electronic HFT makes markets. Do they still use similar strategies where they purposely, since they are the market maker, quote prices and move the trading in a contradictory direction to the supply/demand situation for the stock?

 

[Daal]

What they can do is to add supply or demand at certain points and give people a false impression with regards to the supply and demand. This in turn leads to incorrect pricing of the asset. A typical example is to prevent a stock from closing red by bidding it and supporting every time it gets there