posted
originally posted by J_U_ICE in his eqbm thread... i thought it deserved it own thread for better recognition. cool juiceman?
J_U_ICE Member
Member Rated: posted July 01, 2006 00:26 Some may have already seen this.
ARTICLE ABOUT MMs: EXCELLENT
More and more investors are winning the game nowadays despite all bashers that float through the Internet that has become part of the game. Floor traders of market makers often watch CNBC, news wires and bulletin boards in order to follow the market during trading session. OTC BB market makers (MMs) don't use fundamental and technical analysis. However, what they do realize is a lot of dumb money does use this newest niche charting or TA (Technical Analysis) to run a stock either up or down. To the MMs this is like taking candy from a baby. Simply they will paint the tape and use whatever tactic to affect the charting bands. Thus the public and dumb money they will have eating out of their hands. Effectively the MMs can show a strong stock growing weak by manipulating the close price in order to generate selling volume, delaying trading time to manipulate trading activities, or even stalling the ask without honoring orders to hold a stock price.
MMs follow a simple code of business when making a market in a stock especially an OTC BB / PS. That is the level that stocks will seek that yields the most volume. Now this is very important because they make money on the volume buying at the bid and selling at the ask. In other words, by making the market they are buying low and selling high. Now smart money adheres to that rule, so do all the market makers. They could careless whether the stock is at $22 or at $0.0002. All they care about is the action thus being able to sell stock at the offer (The high) and buy stock at the bid (The low). To increase their profitability, they make the spread as great as possible on as many shares as they can especially if the volume falls off.
When they have mostly all "buy" orders, that's not the price that's going to yield the most volume. They need both buy and sells to get the maximum action. Remember, MMs play the volume. If the volume decreases and there are mostly Buys that become a one way volume, Buy volume. So what they do is let the stock run up to a price where it runs out of steam. They fill all the buy orders there that they can and then comes the pullback one way or another naturally or induced. During the pull back they can buy tons of shares and flip them to those averaging down or trying to catch the bounce. At some price, the stock will be relatively stable and yield the most volume. Now that is the average price you will see
The average price is the point where a stock seeks a level where MMs can profit on the most volume. So during the day that is the price that MMs and momentum/day traders want to see the stock at. Why? Because they know the public and dumb money was chasing the price thing up. Most of the time, the MMs love a flurry of Market Orders which is a dead sign of an artificial run or momentum. Merely it is money in the bank for them. Most get hung in a momentum or day trade or by the tactics of Market makers, who are in the business to screw the public every chance they get. They are merely making the market liquid is their reasoning.
The market makers have created an added complication to the OTCBB's /PS chaos of the already volatile intra-day price movements created by dumb money, momentum and day-traders. MMs can not relate to long-term holders in the OTC BB / PS. That makes absolutely no sense what so ever. They feel a large percentage of trades in the OTC BB / PS market consist of short-term or day-trades, MMs merely view the barrage of buy and sell orders as relatively neutral to the market. How they figure it is when the average dumb money buys shares in a company, the MMs feel or rather know with some certainty it is very likely that dumb money will want to sell back those shares relatively quick on the slightest drop.
Now somewhat comfortable with this logic the MMs merely short sells into the buying and attempts to take the stock down in an effort to "shake out" the weak. Since it is tough to know for sure whether a move is the beginning of a trend, or a routine shake out, this type of deception works quite well for the MMs. What the long-termers do to a stock is surprise the MMs because instead of falling, the shorting has no effect and the price goes up. Now that puts the MM at selling low through shorting and thus having to buy high in order to cover.
Boy, when this happens, the MMs are not very happy campers. The investors and traders aren't supposed to be doing that to them. Now it becomes time to pull out every trick and tactic in the book in order to attempt to get a Bear Raid at every dollar/cent mark or percent from where the stock started. Could be a fraction of a penny in smaller priced securities. What MMs do is give you a chance to make a small amount of money for your momentum and day trading style by shorting it at these levels and trying to get a bear raid each time. Each failure is compounding the MMs short position so they let it go to the next level. Now come more deliberate tactics MMs use to coerce Bear Raid or panic selling.
Once the MM is caught short and the strength of the buy is overpowering the MM will want to cover his short position. So the MMs call up one of his friendly MMs and says some like "the weather is sure rough today." The MM along with the other "friendly MM initiates a down tick about the same time. Now this can also be done with a certain amount of shares such as an infamous 100 shares flag. This down tick gives the illusion of weakness designed to hopefully begin the bear raid of selling. The fickle, fearful, day trader, momentum and short term begin to sell out allowing the MM to cover his short position at lower prices. They will move it down quickly to get it to a price of least financial damage. Problem they have is long-term investors in the OTC BB / PS. They start accumulating and buying comes flying in when they take it too far thus the MMs took it to the point of volume again and not only investors the other MMs step in the make money on the spread.
Alas the poor MM does not get to cover. Now comes various tactics like stalling, boxing, or even locking the Bid and Ask for a while.
Of course, MMs aggressively deny any sort of collusion designed to fix quotes or spreads.
MMs have a vast resource of tactics and it would take probably more than a lifetime to figure them all out.
So how do investors somehow manage to overcome the obvious deception in OTCBB arena? One answer is indirection trading style by going long which the MMs do not expect. In the war between investors and public companies on the OTC BB / PS vs the MMs, if the MMs have all the advantages due to position or other factors, direct confrontation such as momentum or day trading hitting the stock is a definite death sentence.
However, an indirect approach tends to weaken the path of least resistance before slowly overcoming it. The most effective way is long-term investors slowly accumulating and holding thus drawing the MMs out of its defenses making them as naked as their short position. This is war so this slow accumulation and holding for the long term easily achieves the desired effect to force MMs to cover and knock off the tactics or bury themselves deeper.
The MMs when caught will especially use every trick and tactic in the book to get a Bear Raid thus playing on the individual fear of most people. The MMs feel they have information and position advantages over the investors as long as the holding of the stock is in weak hands or short term holders. Since they are OTC BB MMs who believe all OTCBB companies are not worth investing and management is ineffective regardless what is happening within the company. Furthermore, MMs know they are in the position to impose a great deal of influence in OTC BB stocks trading when it suits their needs.
This inherent power of position enables the MMs to move the markets at any time up or down. As a result, the only way to draw them out of their favorable position is going long. Now this does not mean just any company but to effectively nail the MMs, Longs must find the great company on the floor and accumulate long before the MM tactics and games begin.
-------------------- Cashing checks in two forms: Money and Reality
GLTA, The Phat Man Posts: 1236 | Registered: Apr 2006
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Phat - You did a great job on that and I. for one, do indeed appreciate the time, effort and thought that went into that. WHY, OH WHY [?], IN THIS DAY AND AGE, ARE THE PENNIES NOT GONE ELECTONIC AND THIS 'MM' STUFF OVER AND DONE WITH.[?]. Who controls the 'MM''s??. Do brokers pay the 'MM''s ? I enjoyed reading: "Wallstreet VS America" by Weiss. He comes right out and tells it like it is. B-U-T - why is no-one, any-one doing anything about this SAD MESS? Appreciate all further input.
Posts: 188 | From: MISSOURI | Registered: Jul 2005
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posted
Another issue that is involved here is Offshore Hedge Funds....Birds of a feather. They work together........ Congress is trying to get to the bottom of it, but all we get is a snow and stall job when ever we get a crack at um...Look what happened just last week, they muzzeled the SEC whistle blower right in front of us.
Posts: 10729 | From: oregon | Registered: Feb 2005
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It is our choice to go long on an OTC OTCBB.... There are some surprisingly good OTCBB'S out there...They are not all scams..Problem? As pointed out earlier in this discussion, myself and so many others are used to trading them fast for profit and selling fast when they start to go down...
But what else are we to do, just let our money sink? I am begining to become a little more comfortable holding longer term, but again this is personal choice..Attitude can be infectious, as we see everyday on this board...
Posts: 10729 | From: oregon | Registered: Feb 2005
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Hi Dustoff, I must have missed that on the whistleblower and the sec - would you mind giving me the short on it. Myself - I have informed the sec/nasd on orders that should nave been filled and were not. I had all the info [15 sources], tons of volume, orders in from 2 to 21 days, 'GTC', proof the price went way beyond the sell orders,proof the stock sh price drop A-N-D then split into another version of the name with an'E' onot and suddenly the stock is 1/3 of what it was - The part with the 'E' has the larger portion of the sh price and I cannot even have my money back.!! I have files, on files and proof on all of this.
Lawyers will say: "Go to arbitration". I refuse - arbitration favors the other side [WITH YOUR MONEY] and you will get nothing and spend upwards of $7,000.00 to go there. ARBITRATION SHOULD BE VOLUNTARY NOT MANDATORY AND YOU CANNOT JOIN THE BROKER U-N-L-E-S-S- YOU sign the mandatory 'contract'.
This folks, is not legit in my eyes. You should not have to be forced to H-A-V-E to have an arbitrator if the broker/MM does you wrong.
THIS IS A SET UP. Wallstreet vs America even expounds on that.
AND GUESS WHAT?: The NASD loses my papers [NEVER SEND ORIGINALS - AND I DID NOT - I REPRODUCED COPIES OF THE ORIGINALS].Then tried to tell me they sent them. Well I can easilly prove they did not by the weight of the original I hold and the portion 'LOST' would account for nthe difference!!].
WHAT a world!
Posts: 188 | From: MISSOURI | Registered: Jul 2005
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posted
Hi Dustoff, I must have missed that on the whistleblower and the sec - would you mind giving me the short on it. Myself - I have informed the sec/nasd on orders that should nave been filled and were not. I had all the info [15 sources], tons of volume, orders in from 2 to 21 days, 'GTC', proof the price went way beyond the sell orders,proof the stock sh price drop A-N-D then split into another version of the name with an'E' onot and suddenly the stock is 1/3 of what it was - The part with the 'E' has the larger portion of the sh price and I cannot even have my money back.!! I have files, on files and proof on all of this.
Lawyers will say: "Go to arbitration". I refuse - arbitration favors the other side [WITH YOUR MONEY] and you will get nothing and spend upwards of $7,000.00 to go there. ARBITRATION SHOULD BE VOLUNTARY NOT MANDATORY AND YOU CANNOT JOIN THE BROKER U-N-L-E-S-S- YOU sign the mandatory 'contract'.
This folks, is not legit in my eyes. You should not have to be forced to H-A-V-E to have an arbitrator if the broker/MM does you wrong.
THIS IS A SET UP. Wallstreet vs America even expounds on that.
AND GUESS WHAT?: The NASD loses my papers [NEVER SEND ORIGINALS - AND I DID NOT - I REPRODUCED COPIES OF THE ORIGINALS].Then tried to tell me they sent them. Well I can easilly prove they did not by the weight of the original I hold and the portion 'LOST' would account for nthe difference!!].
WHAT a world!
Posts: 188 | From: MISSOURI | Registered: Jul 2005
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posted
Anyone, I do not understand How a tape is"painted" - What does this mean? How do they do it? and is it legitimate? Boy - I'm a huge pusher for let the pennies go ELECTRONIC in full. If we had a petition YOU FULL KNOW WHO WOULD WIN ON THIS!!
Posts: 188 | From: MISSOURI | Registered: Jul 2005
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A.J, the hearings were on thurs, Congressional..
From what little bit they gave us live, I cought live on CNBC..
Man, you could see on the guys face he had been hammered by the leash and muzzle boys..Some very heavy legal types must of really worked him over before broadcast...Anyone who saw the tidbit we got, would probably concour.
Posts: 10729 | From: oregon | Registered: Feb 2005
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Geee......they forgot to mention dilution! Hmmmm..... I wonder why? I guess I'm dumb money, cause you won't see me holding a pink long term....ever! I wonder who really wrote that article??? Hmmmmmm.......
Vagabond
-------------------- You are what you do, not what you say! Posts: 473 | From: Where ever the next train takes me! | Registered: Apr 2006
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Tex - Those links are terrific - just what I always wanted to fully know and understand. Copied all four and will be my before bedtime readin g tonight. A real education. Thank you so very much!
Posts: 188 | From: MISSOURI | Registered: Jul 2005
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Thanx Dustoff, They never will let all fully out of the bag. 'THEY' Let you see what they wanted you to see!! And that was to put FEAR into the hearts of honest men. Sad but True.! I am a believer that 'THEY' will get their due on the real and final PAYDAY!!! And all stolen from the good, the honest, the true, will come back to them a thousand fold!!
I hope the whistleblower finds his way O.K. in this wilderness full of crooks and thieves. It is hard for even a strong witness to back the guy up.!
Posts: 188 | From: MISSOURI | Registered: Jul 2005
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Vagabond, I wish I could do the same but the MM's will not allow my longstanding sell orders through. I guess they are just too busy 'USING' my money to make themselves rich!!! On dillution - This seems to be an accepted practice - has it always been that way or is this a more recent diversion? It is frightening to buy anymore just because of that strong possibility.
Posts: 188 | From: MISSOURI | Registered: Jul 2005
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After rolling this around a little while - I see the suggestion there to go L-O-N-G.
IF YOU KNOW YOU HAVE A GOOD TICKER: My thoughts would be that everybody start buying 'CERTIFICATES' and keeeping them in a safety box or vault. This would shake up the 'MM's as well as the brokers who would not hold the cash anymore.
This was a practice in the older days - My DAD did it, the family did it. Now it is washed up. I hold one that went down the drain and I think they wanted everyone to sell out losing big money. I decided to hold a certificate because I do not think it was time yet and I really think this MONKEY will do something when the technology comes out of the closet it has all been in and then I will reap.
BUT by holding certificates - you are in full control and there is no broker to say you are below margin or something like that.
Posts: 188 | From: MISSOURI | Registered: Jul 2005
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quote:Originally posted by A.J.: Tex - Those links are terrific - just what I always wanted to fully know and understand. Copied all four and will be my before bedtime readin g tonight. A real education. Thank you so very much!
quote:Originally posted by A.J.: Vagabond, I wish I could do the same but the MM's will not allow my longstanding sell orders through. I guess they are just too busy 'USING' my money to make themselves rich!!! On dilution - This seems to be an accepted practice - has it always been that way or is this a more recent diversion? It is frightening to buy anymore just because of that strong possibility.
I have no doubt there has alway been dilution in the pinks. I mean most of the pink are nothing more then shells solely for the purpose of directors of the company (many times one person) profiting through dilution, with never any intention of producing anything or making any money. Of course they will always blame "naked shorts" for the PPS drop, but I don't care about all that, just as long as I can sell it for more then I bought it. It does crack me up to see some on this very board post about no dilution in a company, even posting the share count from the TA, and when you go back in the thread a couple of weeks you see the same poster stating the same "no dilution" talk but with a lower share count from the TA. Hmmmmmm.....Once again, I don't care, but I'm sure many believe what they read on this board, when in fact the very people they trust maybe shouldn't be trusted. In my book the pinks are plays, never investments. GLTA
Vagabond
-------------------- You are what you do, not what you say! Posts: 473 | From: Where ever the next train takes me! | Registered: Apr 2006
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You know Vagabond, I would look at pennies as plays as I started out to do - BUT if the MM's won't let you through then You cannot play! I honestly would love to see PINKS go ELECTRONIC all together. That would allow the owner of a good Co. as well as a trader always know it's true worth.Worh determined by the buying and selling pressure. If there is none then they have to do something about it - Like advertise nd make video's. We do not need someone stealing our profits in order to get the job done. There should be something done to stimulate the Co. owner - THE SEC/NASD should be in there watching these Co.'s like a hawk as to WHETHER OR NOT THEY TRULY HAVE A CO. AND IF THEY ARE DOING SOMETHING TO MAKE IT WORK.
THIS WHOLE SCHEME OF THINGS HAS OBVIOUSLY GONE ON WAY TOO LONG IN HISTORY AND NO ONE IS DOING A DAMNED THING ABOUT IT. I think it not only strange, but suspicious that brokers do not all step in and take the bull by the horns and put an end to it. Since they do not and could - they must be a part of the criminality. So - I just look for the winners like a needle in a haystack. I'm big on SSTY for now. It has more promise than anything I have researched.
Posts: 188 | From: MISSOURI | Registered: Jul 2005
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everybody would like for pinks to be watched more by the SEC. Everybody would like the end of the scams.
But in the end...this is the bottom of the bottom. If the SEC did watch the pinks more there would inevitably be a new section...maybe "the greys"...that bottom feeders like you and I would play and complain about how many scams there are.
I've noticed you've got a rather large chip on your shoulder about MM's not filling sell orders.
I gotta tell you, from what I've heard of your problems...something doesn't add up there. I think there was/is a problem either within your line of communication on your sale orders or you had unrealistic expectations that a fill at a certain price had to happen.
I would suggest you work directly with a broker for the next few sells to make sure there isn't anything wrong with your system and ask him/her if what you want to place seems reasonable.
BF
-------------------- No longer eligible for government service due to lack of tax issues. Posts: 5178 | From: Up North | Registered: Dec 2005
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Bigfoot, I am sorry you have this 'feeling' about a 'CHIP' on my shoulder. I am in full disagreement with that totally. REASON: I know what I am doing, HAVE checked with several professional in brokerages I am not client in [For unbiased opinion], and even an attorney who worked in and for the SEC.
They all agree there had to be foul play amounting to at least $50,000.00 and that my money was being 'used' and shorting was ongoing.
BIGFOOT: I have put extensive time, copy work in color and blk and wht - I have documented every step of the way. READING: WALLSTREET vs AMERICA also confirms what I say as the articles posted herein by TEX [for which I extended my appreciation]
NO, a chip on my shoulder - I'm not that a way - just a 'VICTIM' for absolutely, positively sure.
Posts: 188 | From: MISSOURI | Registered: Jul 2005
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To 10of13 Who put a lock on your Post?? I, personally, do not like that JUST anyone can do this and esp without notification and a GOOD reason why. Someone may start one thread for a reason. #2 guy may start on because of his/her own perssonal approach. Some one did this to my SSTY/TPID/TPDI/GSFC post [main penny board] today and I am highly upset as I DO have a different approach which is my perogative - Is it not?? THIS IS AMERICA - IS'NT IT? Hppy 4th Of July to all.
Posts: 188 | From: MISSOURI | Registered: Jul 2005
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OK bud. Seems you've done background to try and figure it out. I'll believe that.
Just haven't had the type of experience you have discribed and something seemed wonky.
Sorry man, sucks to be a victim.
-------------------- No longer eligible for government service due to lack of tax issues. Posts: 5178 | From: Up North | Registered: Dec 2005
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quote:Originally posted by A.J.: You know Vagabond, I would look at pennies as plays as I started out to do - BUT if the MM's won't let you through then You cannot play! I honestly would love to see PINKS go ELECTRONIC all together. That would allow the owner of a good Co. as well as a trader always know it's true worth.Worh determined by the buying and selling pressure. If there is none then they have to do something about it - Like advertise nd make video's. We do not need someone stealing our profits in order to get the job done. There should be something done to stimulate the Co. owner - THE SEC/NASD should be in there watching these Co.'s like a hawk as to WHETHER OR NOT THEY TRULY HAVE A CO. AND IF THEY ARE DOING SOMETHING TO MAKE IT WORK.
THIS WHOLE SCHEME OF THINGS HAS OBVIOUSLY GONE ON WAY TOO LONG IN HISTORY AND NO ONE IS DOING A DAMNED THING ABOUT IT. I think it not only strange, but suspicious that brokers do not all step in and take the bull by the horns and put an end to it. Since they do not and could - they must be a part of the criminality. So - I just look for the winners like a needle in a haystack. I'm big on SSTY for now. It has more promise than anything I have researched.
AJ asks: "To 10of13 Who put a lock on your Post??"
AJ, I did that--this thread was already started and going, which 10 did not relaize...so I locked hers--with an explanatory note, I thought -- then moved this thread to the appropriate forum. She had indeed posted hers in this forum, but this thread was already established... make sense, yet?
posted
How does one put a lock on a post? I didn't see anything in the rules that says there can only be one thread per item. Seems I've seen more than one thread on seversl tickers.
My big hang on this is that some tickers disappear for a day or two or three. If this happens then if someone else comes along anf wants to make a thread for a ticker that HAS NO THREAD - then why not? If the thread is not available - who's fault is that?
Posts: 188 | From: MISSOURI | Registered: Jul 2005
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Members can't lock threads; fairly common practice to discourage dupe threads (re bandwidth); threads "multiply" cuz mods can't be everywhere; sometimes, dupe threads are created by those wishing to take advantage of fellow members or newbies by "hiding" history/DD in the former thread; sometimes, the original is easily found and the new poster creates a new one from innocent ignorance or just plain laziness, refusing to do a "search"; sometimes, the original is too deeply buried to find or else the stock has material changes that do in fact render the former thread obsolete.
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-- then moved this thread to the appropriate forum. She had indeed posted hers in this forum, but this thread was already established... make sense, yet?
