If one wants to do well when they commit to play a game it’s best to know the rules!!
There are three main components that influence the price action on a daily and minute by minute basis.
1) Da-Boyz (a huge network of in da-know play-r’s who provide support and/or resistance on a regular basis)
2) In-Flows and Out-Flows (scheduled and unscheduled selling and buying of financial instruments)
3) Expected and unexpected events that cause play-r’s to sell and/or buy.
I’ve written much about da-Boyz so we’ll skip to number two and delve into what is likely the most influential component.
In-Flows and Out-Flows seams simple enough right, but is it? There are two types of in-Flows and Out-Flows, expected and unexpected (hey, that aligns with number three, LOL), and both play a role in da-Boyz behavior (WTF, that’s number one, da-Boyz dat is, LOL), and should be considered by anyone taking a position.
The largest expected In-Flow today are 401K deposits and with employment and the economy at good leves they represent Billions of in-Flows every month. Not many play-r’s know this but the 401k was born in 1985 and became widely adopted by large corporations by 1990. By 1995 they went viral and the amount of deposits had gone up ten-fold since 1985 (check the DOW and S&P500 charts from 1985 through 2000). Today, well, the 401k is EVERYWHERE and has been adopted by many small and medium sized companies.
Obviously, 401k deposits are expected, even scheduled on regular intervals, so much so that da-Boyz have paid big coins to the insiders to KNOW the actual stocks, funds, or whatever financial instrument are going to be purchased on a specific date!!!
In addition, before 1985 the stock market was for play-r’s with “Big Money”, right? Fast forward to post 1985 and for the first time blue collar workers, professionals, and anyone else with access to a 401k were now providing In-Flows into the Markets. In fact, look at the DOW and S&P500 charts from 1985 through today… Up, Up, and more, well, UP!!
The larget expected Out-Flows today are withdrawals to purchase and/or pay obligations and we have been in one of those purchase/obligation periods since early August, the infamous back to School/College period!
And what did da-Boyz due before the expected Out-Flows’s began, they drove prices UP and unloaded their inventory of long positions so they would be well positioned with Cash to purchase all the inventory being dumped by those seeking cash to meet purchase/obligation demand. This is a seasonal thing and as simple as it is some still don’t know WHY prices drop in Aug/Sep on a regular basis but’s simply the influence of the number two component.
I could go on and on in regard to the various expected In-Flow and Out-Flow events but I think you can’t extrapolate form the said example!!??
That said, once da-Boyz have allowed prices to drop to a discounted price (basically paying less to the many sellers trying to dump for cash), they will start buying/accumulating inventory and prepare for a JAM JOB to unload at, well, higher prices, BassTurds…
One last thing, I’ve written about KNOWN events but what about the “Unknown”?? Well, there are events (selling and/or buying) that take place that ONLY da-Boyz have knowledge of BEFORE they happen. How’s this possible you ask, well me-amigo’s, it’s simple when you have a network of insiders who get paid big coins to inform da-Boyz’s of said “Unknown Events”!! Some of these events become public while others NEVER get released to the public archives, OUCH!!!
In summary, the number two component would rule the day if it was not for da-Boyz intervening at THEIR convenience to support and/or resist price action above or below a given level…
The number three component is obvious, cause a frenzy or panic and play-r’s act accordingly, enough said!
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