Come to think about it. Today was MM month end. That would explain the heavy sell-off late in the day and if I am right we will not see much selling the next 3 days.
What I am referring to is "Month End" for Market Makers and Funds. Most (about 75%) Market Makers and Funds use the "last settlement day of the month" to "Mark to the Market" their long and short positions.
If I was a Market Maker for a brokerage firm I would primarily being compensated by my "trading profits or losses". For example if I end the month short 2,000,000 shares of a stock that I shorted at say an average of 0.008 and it closes at .003 on my closing day, I will show a $10,000 profit on my books. My Brokerage firm will probably give me 25% of that unclosed position as a bonus. But if the stock closed at say $.013, then my firm would dock me against my other profits at least 50% and maybe more of the amount I am underwater. This is pretty much how it works with MM's.
So you can see why there might be an incentive for MM's to play Month End Games. Which is exactly what we all witnessed today with that sudden selling burst
"You can't be a real country unless you have a beer and an airline - it helps if you have some kind of a football team, or some nuclear weapons, but at the very least you need a beer". F Zappa
