Let me repeat it, only Government activity will try to only protect the line. When the price bounces beyond the line, the buying support just disappears suddenly.
Hedge funds buy baskets of stocks when doing so looks good to their models/ algos.
The Fed is not allowed to buy stocks, they are allowed to buy government securities in open market operations in order to achieve the target rate for the federal funds rate. The guidelines for this are explained in the Section 14 of the Federal Reserve Act. You can find the Fed holdings in the Federal Reserve Statistics
I like that you are trying to think things out, though.
Posting your thoughts is a good way to learn, if you keep an open mind and research the better replies to your posts.
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