Market Manipulation Pretty Obvious- Take May 7th...
Mr. Martin Goldberg, put it in much more blatant terms: "...with the stock market appearing like brothel with all the late trading, insider trading, program trading, accounting shenanigans, earnings management, insider selling, and media spin, etc., who in their right mind can hold Exxon Mobil (in a college savings account yet) when it goes to $36?"
"Brothel?" That's a pretty strong word. Yet, it totally encapsulates the disgust of many professionals when it comes to the un-ending "late trading, insider trading, program trading, accounting shenanigans, earnings management, insider selling, and media spin" that seem to be the order of the day. A good example—in my humble view—is what took place on Friday, May 7, 2004. As many may recall, on that day the bond market plunged and so did many stocks at the NYSE. In fact, that day the NYSE experienced one of the worst breadth ratios ever, 12:1! On that day 256 issues advanced, while 3152 declined and the NYSE fell 119 points. Interestingly, NASDAQ and most notably the NDX held rather well. The NDX fell just 12.82 points, while the shameless talking heads at CNBC marveled throughout the entire day at the "strength" and "resilience" exhibited by tech, which they immediately interpreted to be a "good thing" for the market!
At the end of the day, I looked under the surface to see how much strength there really was in tech. On that day NASDAQ had 832 advancing issues, 2343 declining issues, 587,109,000 shares made up the up volume, and 1,012,777,000 made up the down volume. To begin with I do not think a market with a breadth 3:1 in favor of decliners is a "strong" market, despite the blubbering to the contrary by the spin masters of CNBC and the like. Second, in examining the up volume that accompanied the up issues, this is what I found out:
Just 18 stocks of the 832 advancing ones were responsible for 347,000,0000 shares of the 587,109,000 that made up the up volume. In other words, 2% of all advancing issues were responsible for 59% of all the up volume! Moreover, by some "strange" coincidence, all of those 18 stocks were components of the NDX! http://www.financialsense.com/Market/wrapup.htm
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