In reality ...this is NAKED SHORTS vs. Shorting Discussion
Boston127- I thankful this came up- as it gives me an opportunity to bring a major issue to light that will surely help investors better navigate the OTC.
FOR STARTERS- I don't care about when Clay posts and I never did and I never will. One man and one group do not control the markets ...and if they do...you are IN the wrong stock. He is a chartist - that is showing you price action in the past and it's never indicative of the future- as NEWS TRUMPS ALL. - and he has been an IRP on this site for 8 years. He was paid TENS OF THOUSANDS to put up charts for stock promo groups and companies themselves. You can find all of this info is the IRP section on IHUB and notice he was removed in 2016. I don't care. That will always impact my thoeries and beliefs. I wish him nothing but success. There is a huge reason why many WILL misunderstand the price action of OTC stocks THAT RUN seemingly much higher than in 20 day moving average. The most commonly - is the idea of SHORTING a stock VS actually NAKED SHORTING by market makers (who are nefarious and do use tactics like hire board posters)
That being said - it is highly more likely to me that he was telling his "group when to sell" and potentially "rebuy"- OR HE'S JUST POSTING ON HOT TICKERS-- as he puts out 50-100 charts a night on ALL THE TICKERS WITH MOST ACTION and then his chosen group of stocks. So- although it is FUN to blame one person for the demise of a stock that has a fantastic first run of the Elliott wave 3 or 3 extended...it is very likely that the maker who controls the box- naked shorted the stock to bring the price back in line the best it could AND make money along the way. Thry make money regardless the swing. If they can make a market - they will. Most of these stocks are run by computers via a quotation system and software that runs 4 total stocks daily estimate. That's the OTC. WHEN PRICE ACTION GETS CRAZY - they do use a human to help out and orchestrate the trading. COMMONLY- you will see NITE using CDEL now to act as the secondary market maker. Whereas another interesting change - many larger retail use VNDM as a scare tactic on the box to grab shares before a run. Whenever VNDM shows what they have- you know they are likely retail.
Let me tell you my theory on $KWFLF-- the stock has been trading in the .65-70 range for months. All of a sudden- the volume picked up BEFORE ANY NEWS. The stock began to trading over $1. That's considerable. One the day of news - the STOCK market maker was likely caught blindsided. He needed an alternate market maker- that we call- the "secondary market". What happen is - the makers (who are brokerages- and in the business to make $) hired another maker to help. They immediately began to bring price action down on the announcement of any thing negative after a 300% run north. The stock settled at exactly where it SHOULD be trading of insider buying didn't occur quite likely. The chart reset. The price actually is pretty decent. Im sure MANY took profits. That stock closed could trend $.98 - $1.50 pps BEFORE the next wave. Just the Fibs alone. Nice action though. Someone knows something. That's always a good sign the stock has potential when volume is up. ANY PROMOS BEING RUN?
Hope you liked this REAL answer. When folks better understand what they are really up against / they will better understand the reason they now see 5 digit trades ... AS WELL- these make short positions do NOT need to close immediately. It's doesn't work the same way as traditional shorting of stocks - which - I'm sure folks on offshore accounts do - and try to do - to make some sort of living. Just like in the game of CRAPS.
That being said- Makers rely on each other to help them create and continue to create a fair market. If the pps gets out of hand - the market needs to stabilize. If a HUGE BUY or a HUGE sell occurs that could actually greatly change the price action- these trades are commonly WITHHELD until after close and appear as about of sequence trade - a combination of a full trade throughout the day. It's within these rules that Makers also work to sell each other stock when they need to and when they can see LEVEL 3- and understand the markets as a whole. Right or wrong - this is how is works. NAKED SHORTS are usually the answer in the OTC. Shorting groups do play with stock all day long in every market - but they can do very very well in certain Nasdaq type but generally over $5 and not a penny stock etc. BUT- I'm sure it exists.
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