[Eric Johnson]

Here is what I got from it, the basic input that we use for technical indicators is not sufficient to render useful information. This is due to the unique factors that go into forming each bar. We cannot tell things like, where the volume was generated from, the duration or intent of participants, if people are opening or closing positions, and so on. He says we need to use the price sales data calculations to get a truer understanding of the market condition.
I think it is an interesting point, I sometimes wonder if the market technicals work because so many people are using them, rather than any real reason of supply and demand. Don't get me wrong, I like indicators as measuring tools, but I often use them to see what the crowd is likely to be thinking.
So please share or link to what you find useful for price sales calculations. Depth is a good thing for perspective.

[felix36]

True Eric, Thanks for your help. I trading with stock options using their own algorithm (NAD) for tracking entry and exit of capital (in and out of stocks). I wrote about this topic in opcije.com, unfortunately in the Croatian language and I had quite a success in trading help of indicators used to thinkorswim platform. Here are some of the links, though I'm not sure how many will be understandable.

Declare lower;
#thinkorswim indicator study code by Felix
# NAD
# Market Data Manipulation Indicator
# October 14 2008
Input ma5=5;
Input LEN=390;
Def formula=(((close-open)/volume)/open)*100;
Def SELLING=volume/(((formula*volume)/100)+2);
Def BUYING=volume-SELLING;
Def DIFF=BUYING-SELLING;
Def suma=sum(DIFF,LEN);
Def ma=Average(suma,ma5);
Plot NAD = ma;
NAD.AssignValueColor(if ma > ma[1] then color.dark_green else color.dark_red);
NAD.SetStyle(Curve.Firm);
NAD.SetLineWeight(4);

Seciranje noviad indikatora 2. dio | opcije.com
The Matrix, but with money: the world of high-speed trading
Can Goldman Sach's Stolen Code Be Used to Manipulate the Markets?

[Eric Johnson]

Wow, gathered what I could from the links. It looks like you have a system of indicators or a way to tell when high frequency trading is in action. Then perhaps a way to use the data flow from price sales to trade the market.

It looks like you have a lot to share, I do not have the Sink or Swim software so I am limited. Since it looks like you have a unique perspective on market manipulation, I welcome what ever you feel like sharing here. I do not want to labor you, just if I can help get something this interesting to the creative people, I am in. If you want to do another separate thread I will also assist. I live overseas and labor to get ideas communicated daily.

[Shawn]

It is the world economy that is actually steering the stock market. Here I am referring to the US, China, Japan, Australia and Asia stock market. The recent v-shape recovery trend is definitely understandable if one were to consider the true state of economy of China and Australia. It is the media that is feeding us with all the bearish news where they have been so entrenched with the US market. Their reluctance to give China's economy a good analysis without fear and favor is the primary reason most investors in the streets wouldn't be able to grasp the fundamentals behind the v-shape recovery. We always hear from the smart financial analysts, highly successful fund managers and great economists from the West. The fact is that we have to always balance our source of information in order for us to understand the current fundamentals of the world economy, helping us make better judgment and decisions for our investments.

[Kiwi]

Originally Posted by Shawn »

It is the world economy that is actually steering the stock market. Here I am referring to the US, China, Japan, Australia and Asia stock market. The recent v-shape recovery trend is definitely understandable if one were to consider the true state of economy of China and Australia. It is the media that is feeding us with all the bearish news where they have been so entrenched with the US market. Their reluctance to give China's economy a good analysis without fear and favor is the primary reason most investors in the streets wouldn't be able to grasp the fundamentals behind the v-shape recovery. We always hear from the smart financial analysts, highly successful fund managers and great economists from the West. The fact is that we have to always balance our source of information in order for us to understand the current fundamentals of the world economy, helping us make better judgment and decisions for our investments.

Oh Shawn, I suspect that your world view is about to get a good solid shaking. For a hint on the nature of that shaking you might consider:
- which economies in the 30s suffered worse, exporters or importers?
- if you ignore exports of minerals to china and india the aussie economy is a load of give away supported crap (every tax payer was given a $950 hand out to buy a chinese flat screen tv and help out the retailers).
- finally you might study supply chains and how hard it can be to tell at one end of the supply chain what is happening at the other and react in time.

On the other hand, the media (who most see as having pumped the dump) might all just be nervous nellies.

[Eric Johnson]

I saw we have some similar threads linked lower on the thread page , some interesting posts there also. For the sake of my own research I looked up the following info about the plunge protection team. There are real processes and funds to intervene in market crisis. I just wonder if these days they use "preventative " intervention. Lets say if an obvious bearish head and shoulders formed on the S&P, maybe they would intervene at the neck line rather than at the bottom follow through. Perhaps guide a large channel breakout direction? Maybe just when they want to do some inside trading with fed funds? I mean Madeoff was a Nasdaq leader back in the day, it is not out of the question.

washingtonpost.com: Plunge Protection Team

My mother was the economist that produced the unemployment report for one of the US states. There is massive place for statistical misrepresentation. I think that governmental agencies may stretch the figures for GDP and unemployment numbers. This may not be evil, but it effects technicals, and can drive prices against them.

This brings me to my final point. I agree that the media can be used to guide the markets. Living in Asia, near China, I suspect that their media and statistical numbers are more subject to political control. I post the following article for consideration, as China is a big player.
Mish's Global Economic Trend Analysis: Nonperforming Loans in China Rise to "Trillions of Renminbi"

[jackj]

You're saying that the Working Group, which does exist and is not a secret, is the PPT. FWIW, PPT as it has been alleged, and the role that you're implying, has never been proven. The Working Group does inject reserves to keep things afloat, but that's diff. from outright buying of equities. If there were a PPT, or the Working Group were acting in such a manner, I think that we'd have heard/seen definitive proof of it. As with all conspiracy theories that require many participants, over many years, I can't fathom that someone wouldn't have spoken up, and with definitive proof. The argument against it is that lack of a personal account of it, as well as evidence of where all of these orders are on the books? Where did they get funneled through? I imagine it would be possible for Goldman, et. al. to be in on it and not divulge who was on the other side of these orders that shot the market up, but someone on one of the desks would surely have said something by now that they're putting in orders for a non-company. I don't know enough about the specifics of a trading desk, but it seems like it would be very hard, at the least, to disguise a PPT. Also, it sure seemed to me that they would have acted a LOT sooner during the recent crash if indeed they existed. Pointing to a sudden bounce after-the-fact it's easy to say it was the PPT, but eventually things were going to rebound from natural forces.
Did the equities simply get oversold during the panic, and hence an extreme reaction occurred in the other direction, causing the v-shaped bounce? Did the PPT also cause oil to drop from its highs, or rise from its lows, or did it also simply get overbought, and then consequently oversold, in v-like fashions? Absent any proof (having the Working Group, in my opinion, doesn't fulfill that for me), I opt for the latter scenario. My .02 worth...

[Eric Johnson]

Well said, I think the lines are blurry in the last bailout. Geitners dealings with AIG for funneling bailout funds and providing liquidity for some like Goldman were secretive. Not too hard to hide bulk orders for companies that do high frequency trading. It is rumored that threats to national security secrecy was invoked for these dealings and auditing Fed purchases. So yes, overt and covert funding could flow into the markets at key junctures. Normal market participants could get caught on the wrong side of the trade due to secrecy.

Diverting funding to run around restrictions or publicity is not too unusual of a consideration. It is my understanding of how the Fed monetizing the debt, rebuying from large front purchasers after a week or so.
I will ring the conspiracy bell one more time to be risky, but clear. I recall that there were large market shorting orders before 9-11. I do not think the origins were ever disclosed. If they were terrorists they would have been trumpeted as another reason to go to war.

Really it is all a blurry subject. And more of an inquiry than a crusade for me. The thing that I have learned is that it is all printed money, many times removed from supply and demand. So give these markets room to swing wildly. Selectively abandon historical biases of what should be true market value. Actually for me I rely on the technicals more in normal trading. I am not sure if anyone really knows what the underlying assets are worth anymore. Hence at least people are familiar with technicals and revert to them. Market manipulation has been the theme of this time of intervention and selective choosing of market winners by the government.