I have become convinced that individuals who harangue against discussions about market manipulation are losers who have a narrow of how trading should be done. There is a certain mindset that says, “Practice good technical analysis and it doesn’t matter if the market is being manipulate or not.” These people are court holders, judgers of ideas and lifetime losers in the market. The truth is that practitioners of pure technical lose money close to 100% of the time. It is a good bet that the ones who object to discussions of ideas that irritate them are somewhere close to the bottom with respect to trading results.
The awareness of the presence of market manipulation is relevant to trading securities for the same reason knowing that a set of dice is loaded is meaningful when playing craps. In either game, if one can determine that some kind of affirmative action is causing a certain outcome, it makes sense to use that knowledge the decision making process.
There are certain parties for whom the knowledge of market manipulation really doesn’t matter. Those who practice mechanical systems really don’t need to worry with it. To others with a broader perspective it makes a world of difference.
1.) People with retirement accounts that are equity based.
2.) Equity mutual fund investors
3.) Any trader who works broad market moves.
4.) Anyone who trades long terms
5.) People who want to game the manipulation
6.) People who want to try and profit from the eventual damage the manipulation will cause.
One of the things I learned early in my trading career is that anything that makes a difference can’t be proven. In 2005, when I first conjectured that there was an unofficial government sanctioned asset enhancement initiative in operation I was labeled a tin horned conspiracy theorist and dismissed. Doubt at that point was understandable. More recently the Chairman of the Federal Reserve makes statements clearly implying that everything possible is being done increase asset prices. So, am I sure stock prices are being controlled? I am sure enough to be short a portfolio of stocks, waiting for the destruction of the world’s financial markets to occur.
The relevance of all of this is that controlled markets face destruction. It is often argued that if markets are being enhanced higher, it makes sense to stay long and be happy with it. The problem with that is that they system such as it is, is prone to sudden collapse. Some argue that there has always been corruption in the market and always will be, so why worry about it. Frankly I wouldn’t worry about it if all it was, was organized crime skimming off a little illegal profit. This is the first time in history when stock prices have been managed with the cooperation of government agencies. I would agree that corruption, like radio activity is in fact harmless until it reaches a critical level.
Sometimes I come across as moral crusader but nothing could be further from the truth. When something is wrong I might point it out, but my motivations here are highly mercenary. This is an advantage to profit from a coming disaster and I plan on doing just that.
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