Is the market manipulated?

[viktor_k67]

Quote from Maverick74:

Yeah I never understand these threads. Manipulated markets are the easiest to trade. Markets that are just random are very hard to trade. If I knew that a football team was going to throw a game and Vegas had the line at -3 for the team that was going to throw it, why wouldn't you bet against them?

And why wouldn't technical analysis work on manipulated markets? Technical analysis is based on the observation of buyers and sellers. It doesn't matter who the buyers or sellers are. So if the Fed or anyone else is the buyer then that should show up on your charts.

I just don't understand this argument. Maybe someone can walk me through it and explain it to me like I'm a 5 year old.

Knowledge of the fact that market (or football game) is manipulated does not give you the knowledge where the market go.

However, if you assume that the market is manipulated then in order to win the game you gave to follow the big guys. As you mentioned, if you knew the score in football game then you would bet on it.

So if you assume that the market is manipulated, you will not be looking in technical analysis for a magical indicator but you will be looking for the traces of big money.

If you assume that the market is manipulated, you will be looking at technical analysis completely from different prospective and the same indicators you used before will have new meaning...

The reality is that when you come to the stock market you have to accept that you are alone against all others.

 

[aknaya1]

Quote from viktor_k67:

Knowledge of the fact that market (or football game) is manipulated does not give you the knowledge where the market go.

However, if you assume that the market is manipulated then in order to win the game you gave to follow the big guys. As you mentioned, if you knew the score in football game then you would bet on it.

So if you assume that the market is manipulated, you will not be looking in technical analysis for a magical indicator but you will be looking for the traces of big money.

If you assume that the market is manipulated, you will be looking at technical analysis completely from different prospective and the same indicators you used before will have new meaning...

The reality is that when you come to the stock market you have to accept that you are alone against all others.

Study Wyckoff---how the smart money accumulates and distributes shares over time, that eventually give way to large moves

 

[Maverick74]

Quote from viktor_k67:

Knowledge of the fact that market (or football game) is manipulated does not give you the knowledge where the market go.

However, if you assume that the market is manipulated then in order to win the game you gave to follow the big guys. As you mentioned, if you knew the score in football game then you would bet on it.

So if you assume that the market is manipulated, you will not be looking in technical analysis for a magical indicator but you will be looking for the traces of big money.

If you assume that the market is manipulated, you will be looking at technical analysis completely from different prospective and the same indicators you used before will have new meaning...

The reality is that when you come to the stock market you have to accept that you are alone against all others.

Come again? Technical analysis is about spotting the big buyers and sellers. No matter who they are. If I know a market is manipulated, the knowledge that gives me is that there is likely to be sustained moves in both directions. These are very tradeable and very easily found with any type of TA. I don't understand what you would need a different perspective if you knew the market was manipulated. That doesn't make any sense to me.

 

[NoDoji]

Quote from spxoptions:

Friday's action reeks of manipulation.. TWICE the $SPX wanted to roll over and "something" caused it to reverse course. Looks fishy.

Something like a level of support during a pullback from a higher high in an up-trending channel?

 

[Trader.Fighter]

Quote from Maverick74:

Yeah I never understand these threads. Manipulated markets are the easiest to trade. Markets that are just random are very hard to trade. If I knew that a football team was going to throw a game and Vegas had the line at -3 for the team that was going to throw it, why wouldn't you bet against them?

And why wouldn't technical analysis work on manipulated markets? Technical analysis is based on the observation of buyers and sellers. It doesn't matter who the buyers or sellers are. So if the Fed or anyone else is the buyer then that should show up on your charts.

I just don't understand this argument. Maybe someone can walk me through it and explain it to me like I'm a 5 year old.

Stating manipulation does not imply mutual exclusive with ease to trade.

 

[bond_trad3r]

The market is manipulated to the tune of $85 billion a month and a really really large put option in the event of a market crash. The prudent trader knows to go long and BTFD.

 

[NoDoji]

Quote from Maverick74:

Technical analysis is about spotting the big buyers and sellers. No matter who they are. If I know a market is manipulated, the knowledge that gives me is that there is likely to be sustained moves in both directions. These are very tradeable and very easily found with any type of TA.

 

[Maverick74]

Quote from Trader.Fighter:

Stating manipulation does not imply mutual exclusive with ease to trade.

Of course nor did I state that. I simply said that IF a market truly is manipulated and in one direction, then the technical signals will be much easier to decipher then if it wasn't. Now whether Johnny trader can trade his way out of paper bag is a whole other issue entirely.

 

[Ash1972]

For the 200th time, the Fed has not bought a single share since they started "manipulating" the market. They have simply made money more available for shares to be bought. Investors are going crazy for stocks since they have convinced themselves that the Fed will keep prices up forever.

In 2000 they had convinced themselves that the "new economy" would keep shares up forever.

You know what comes next.

 

[Maverick74]

Quote from Ash1972:

For the 200th time, the Fed has not bought a single share since they started "manipulating" the market. They have simply made money more available for shares to be bought. Investors are going crazy for stocks since they have convinced themselves that the Fed will keep prices up forever.

In 2000 they had convinced themselves that the "new economy" would keep shares up forever.

You know what comes next.

I'm as anti-fed as anyone but people are not going crazy for stocks. I hate to break this to you, but only in the last few months did we take out the highs we had in 1998, yes 1998!!!! That's 15 years ago. Yes I agree the fed has taken the volatility out of the market. And yes, the Fed has created all sorts of distortions in the credit markets. But back to the topic at hand, no one here has been able to explain to me why technical analysis is suddenly going to stop working because of the fed. I guess I'll keep waiting.