First, we don't know if the manipulation that was previously used (Spoofing) has stopped. From my viewpoint having spent some time analyzing the daily trades, it looks like what we have seen since Dec. 1, is legal (could be illegal) shorting. It is impossible to say for sure that no spoofing has been going on. It is also impossible to say whether all the shorting is legal. My opinion is that shorty has been borrowing shares from shareholders and MM's alike. They are not only selling each day, but constantly buying shares just under where they are selling. They purposefully try to keep a decent gap between the bid/ask, so they can stealthily pick up shares that are being sold below their own ask and above others bid, and do so before they hit the 'board'. That way they have added shares to keep the 'capping' at a certain level. As long as shareholders/traders and MM's keep selling shares, they will continue to partially replenish the shares they use to cap the SP at a certain level. I don't think they are able to completely replenish the shares they use, but this tactic makes it less costly to keep the price at certain levels. They only move the price down by selling on the bid, whenever the buying interest slows down at a certain level and when in intensifies, they stop and set up a cap at the new lower level.
This is just my opinion of what is happening. I have asked a couple of traders about my theory and they agree that is likely what is happening.
The shorts do not have endless shares, so the question is how much longer they can do this. If buying interest goes up again, then we should see the spikes we have seen prior to these walkdowns. Ideally we will see only trades at bid and ask, so they will not be able to buy those shares back without others being able to see that they are doing it and move above their bid price.
