I completely get what you are saying, but I don't think you are 100% correct in this case. When you place an order to buy at the ASK, a MM will FILL that order, and then has 3 days to get your broker the stock via DWAC and/or DTC. Now the MM can fill that order one of 2 ways - either it has a real seller and those shares are in that sellers trading account, or the MM can pre-sell you shares before they actually have them in their house account. When a MM sells you shares (when you buy a the ASK) and they fill your order, the time clock starts, and they have 3 days to settle, as per FINRA. If it comes from a real seller - no worries for the MM. If they pre-sold shares they don't have (shorting), now they have to go into the market and get those shares to cover. IN our stock, that means hitting the bid for 100 shares and dropping the bid down, then jumping ahead the next lowest BID while dropping the ASK to scare someone with real stock into selling.
Now in most cases, I would tend to agree with you more than not, but here are some facts as per the disclosures and the best math I can come up with:
370K shares in the float of which 170K shares are more likely than not held by insiders and cannot be sold unless pursuant to rule 144, which means the have to first file a Form 144 with the SEC, and then file a FORM 4 after the sale, within 3 business/trading days. So thats bout 170K really not traceable in the float.
This leaves about 200K shares in the trading public float left, and my best guess between Cheeky, Yourself, TradeAllDay, HokieHead, me and a few others, that accounts for another 140K shares which I could be wrong but you would need to pry those shares from their (and my) KUNG FU grips right now.
That leaves a guesstimate of 60,000 shares left for trading purposes. I am assuming longs are slowly picking off those shares, and over the last 45 days, maybe 50-75% have been picked off by friendly's.
That leaves us about 20K shares left, which may be the shares playing ping pong, but certainly a dangerous amount to be shorting, but the MM computers don't account for float-lock. With such a ridiculously small public actual trading float, its quite possible that in order for the MM to do what they are responsible to do - that is make a market in an issues stock - they trade back and forth electronic shares between themselves, which is evident between the relationship between CDEL and NITE - its almost as if their trading platforms are mirrored and they take turns with NITE doing 70% of the volume.
Thats only one analysis and could be others, but don;t think its far off. You technically "could" be right, but with only roughly 20K shares that are traceable, an average volume of 5,000 shares a day seems to support more my analysis. Just say'n PPP.
I will also add when you see more than 1000 shares on the ASK, I am SURE thats to short the stock because at the time of selling those shares, there is a .20 to .60 cent spread - very easy to cover and thats why.....its all about the BIDS.
Sorry, one more important note, then I will open the floor to discussion - when a MM sells stock, it could be doing so on its own account. If that happens, then they have up to 23 days to cover as per FINRA regs. So when you see a 1,000 share ask, maybe even a 700 or 600, I would put money down on a short play, especially if you look to the other side of the box and see a .20 cent or greater spread.
