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Manipulated Stock Market, Watch the last 30 minutes of Trading

Stock-Markets / Market Manipulation Aug 26, 2009 - 12:46 AM GMT

By: Graham_Summers

Stock-Markets

Best Financial Markets Analysis ArticleThrough this year and the last, the last 30 minutes of trading has been a critical point for manipulation. Countless times the market has shown signs of breaking below critical resistance points, only to have stocks rally sharply in the final 30 minutes of trading. Indeed, there were even several days in which stocks actually reversed losses to close at a gain all in the final 10 minutes.


This is not coincidence.

As I’ve noted countless times on these pages, this market is being manipulated… HEAVILY. And these last minute rallies have come at the hands of JP Morgan, Goldman Sachs, and other large Wall Street firms. I know personally of at least two instances in the last two weeks in which JP Morgan stepped in and bought 1,000 S&P 500 futures at critical points, pushing the market higher just when it looked about to break-down.

You can see this in the below chart of the S&P 500. Stocks staged late day rallies on August 6th, 10th, 11th, 13th, 14th, and 17th (that’s only the last two weeks!) The most critical rallies came on the 10th and 11th.  Without those, the S&P 500 clearly was heading for 980 in a very rapid fashion.

It’s important to note that this late day manipulation can only last as long as there are equity bulls who believe in it. That is, buying a ton of futures only kicks off a rally in stocks if there are enough stock bulls who believe that someone in the futures market knows something they don’t. Much like in poker, you can only run the table when you’ve got a patsy or two to pony up the cash.

And the stock market ran out of patsies last week.

The above chart shows the S&P 500’s daily action in one-minute increments. As you can see, traders shot for late day rallies on both the 17th and the 18th (yesterday). Both days, they failed to get enough bulls to buy into the manipulation (stocks rolled over in the final minutes). They did manage to stage a major rally at the end of the week, thanks largely to options expiration and Bailout Ben pumping $46 billion into the system.

However, now with options expiration out the way… and in light of today’s turnaround to the downside, I’d argue that:

  1. The bulls are out of steam.
  2. Reality is taking hold.

Stocks are SEVERELY overbought now. And yesterday’s turn-around collapse looks to be a herald of things to come. I wouldn’t be surprised to see the S&P 500 back at 980 very shortly.

I’ve put together a FREE Special Report detailing THREE investments that will explode when stocks start to collapse. I call it Financial Crisis “Round Two” Survival Kit. These investments will not only protect your portfolio from the coming carnage, they’ll also show you enormous profits: they returned 12%, 42%, and 153% last time stocks collapsed.

Swing by www.gainspainscapital.com/gold.html to pick up your FREE copy!!

Good Investing!

Graham Summers

http://gainspainscapital.com

Graham Summers: Graham is Senior Market Strategist at OmniSans Research. He is co-editor of Gain, Pains, and Capital, OmniSans Research’s FREE daily e-letter covering the equity, commodity, currency, and real estate markets. 

Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and undervalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.

Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.

    © 2009 Copyright Graham Summers - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

    Graham Summers Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

gdldn
26 Aug 09, 14:37
Agree

I always thought July 8th-10th was blatantly manipulated. Everyone suspected a break and it miraculously just roared ahead to break 900 the following week.


SIVA PRASAD DANTU
01 Oct 09, 00:53
WHAT ABOUT INDIAN STOCK MARKETS

Indian Stock market too appears to be manipulated as it wildly swings in the range of 9000-20000. It is said Foreign Institutional Investors drive the Indian markets. I suspect that Global players determine the market swings in India too.


Clive
01 Oct 09, 03:15
Indian Stocks

No its local market manipulators, alwasy is. Its the foriegners who are getting ripped off, why I would not touch india or any other emerging market with a barge pole!


Keith Shepard
15 Nov 11, 16:13
Leveraged ETFs Re-balancing

I don't think it's "manipulation". I believe the last 1/2 hour volatility you're seeing is from the leverage ETFs (2x/3x) "re-balancing". ETFs have become the market for the most part so we're seeing a rebalanced volatility swing.


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