Is this possible and probable?

[themickey]

As a stock trader I have long suspected (but I could be wrong) that smart money have a way to drive down prices somehow, while at the same time without any trace are scooping them up.
Is this highly likely or am I dreaming conspiracy theories?
Can those in the know make a comment.
The reason for commenting, often I see volume remarkably increasing prior to bottoms.
Now for uninformed traders this gives the impression of capitulation when in actual fact it is the opposite in terms of, stock is being gobbled up asap.
Any hints on how to spot insto's interest within intraday price action or does dumb money (me the retail trader) not have the correct tools available?

 

[sle]

The reason for commenting, often I see volume remarkably increasing prior to bottoms.

Well, do the following mental study. Does volume increase more when stock is close to it's bottom or does it equally increase in other cases (e.g. when the stock is about to leg further)? You null hypothesis is that volume correlates with volatility, and volatility increases when the stock or the index is declining. Your hypothesis is that spikes in volume predict reversals with some degree of confidence. It's a very straight forward study to do

 

[themickey]

Well, do the following mental study. Does volume increase more when stock is close to it's bottom or does it equally increase in other cases (e.g. when the stock is about to leg further)? You null hypothesis is that volume correlates with volatility, and volatility increases when the stock or the index is declining. Your hypothesis is that spikes in volume predict reversals with some degree of confidence. It's a very straight forward study to do

I'm not looking at volatility as such, ie I don't bother measuring this in the normal sense, but my interest is aroused when I see sharp bounces, what I'm attempting to do (might be impossible) is determine on pullbacks, which pullback is just resting of the stock versus which pullback is insto driven on purpose, ie deliberately driven down in order to buy cheaper.
Therefore my query is, can a trader ascertain an insto driven down stock because they want a bigger bite.
Again, I may be dreaming on this, just wanted your opinions.
Maybe impossible to determine deliberately driven down stocks...?
Thx muchly.

 

[jinxu]

Can those in the know make a comment.

Yes there is a a reason why and the way price moves. I've got a few personal theories on why it does.
I think you said on ET once that traders are in competition with other traders and that includes giving away info.
Let my no comment here speak for itself.
Good Luck.

 

[They]

As a stock trader I have long suspected (but I could be wrong) that smart money have a way to drive down prices somehow, while at the same time without any trace are scooping them up.
Is this highly likely or am I dreaming conspiracy theories?

It is reality. google: market maker auction market

Some retail traders have tried to identify it using bid/ask trade data

 

[themickey]

Yes there is a a reason why and the way price moves. I've got a few personal theories on why it does.
I think you said on ET once that traders are in competition with other traders and that includes giving away info.
Let my no comment here speak for itself.
Good Luck.

Thank you for your good wishes. No matter whom on ET, especially the more prolific posters, one can always find something.

 

[themickey]

It is reality. google: market maker auction market
Some retail traders have tried to identify it using bid/ask trade data

Very helpful, thx for this.

 

[Sig]

As a stock trader I have long suspected (but I could be wrong) that smart money have a way to drive down prices somehow, while at the same time without any trace are scooping them up.
Is this highly likely or am I dreaming conspiracy theories?
Can those in the know make a comment.
The reason for commenting, often I see volume remarkably increasing prior to bottoms.
Now for uninformed traders this gives the impression of capitulation when in actual fact it is the opposite in terms of, stock is being gobbled up asap.
Any hints on how to spot insto's interest within intraday price action or does dumb money (me the retail trader) not have the correct tools available?

Could it also be that one party is driving the price down (a big institutional order) and another is taking a risk that this is what's going on and buying? Sometimes they were right and they do well. Other times they guessed wrong and it was a secular move and they lose out. End of the day, perhaps they earn a decent but not spectacular risk adjusted return? Occam's razor and all that.

 

[comagnum]

Therefore my query is, can a trader ascertain an insto driven down stock because they want a bigger bite.

Yes, it is legal and how the game is played when you enough capital to move the market. Check out the whole video, Cramer reveals how he used to knock stocks down.

 

[speedo]

I remember back in 2000 when the markets were crashing, Goldman Sachs would have Abby Joseph Cohen go on CNBC several times a day exclaiming what a bargain stocks were at these levels. Meanwhile on L2 you could see Goldy sitting on the bids of these stocks all day long.