Hi Billid!

You are certainly entitled to your opinion and it is not my job to try and convince anyone of anything. I have more than a few people that think I am out to lunch because I am convinced this market is manipulated at every turn. Thats fine, it does not change my opinion. I did not go out of my way looking for a conspiracy to rant about. I have been in the market for a long time and I am fortunate to watch the trading every day on a tick by tick basis. Something is not right.

My comments are based on my own personal observations and I do not have access to the info that would make a clear cut case. That is part of my point. As a retail investor we cannot prove much of what is going on behind the scenes. The regulatory agencies entrusted with market oversight are supposed to do their job, and yet hardly a week goes by without some new scam being revealed. This means that all kinds of illegal activity is going on all the time, and it SOMETIMES gets exposed, usually after a lot of people have lost money. I am sure a lot of manipulation never sees the light of day, and a lot of the times when it is exposed the perpetrators just get a small fine and no admission of guilt. I wish I could go on with a naive assumption that all is well in the market, but I have seen too much.

Now your questions about the motive is where your doubt seems to come from. Why indeed would someone or a group trade in such a way that is sure to lose money? Have you heard of the concept of a loss leader? You may lose some money on the front end, and then profit from the subsequent activity. That would explain if a trader takes out support, and then is lurking below with lowball bids, so that any stop losses or panic trading end up filling cheap trades to accumulate a position at a lower average cost than just a legitimate buy. Or maybe there is a heavy short position on an intraday basis that never gets reported because it is always closed off before the next update?

I do not pretend to know what is going on, and that is why I just speculated on what may be wrong. Surely if there are billions of dollars involved in active manipulation for the dollar and for oil and gold futures, it is not unreasonable to assume the same players are working to cap stocks that are a big part of the market?

There were lots of people who pooh-poohed the concept of a plunge protection team to support the markets, until it was casually revealed recently in connection with the bailout of Bear Stearns. What other groups are active behind the scenes?

With all of the high profile examples that refute the notion that everything in the markets is just normal trading activity, I do not understand the people that are unwilling to consider to possibility of shady activity behind the scenes. But you are certainly entitled to your point of view.

cheers!

mike