I have a question for all you traders. In Ted's book, he talks about manipulators manipulating the stock market and I can see how the charts show this manipulation. When viewing long-term charts, it's easy to see where accummulation, consolidation, mark-up, distribution, and mark-down occur.

What I want to know are the following:

1. How exactly does a manipulator cause the price of a stock to rise from a base?

2. How do manipultators entice the public to begin purchasing the stock?

3. Who are all the players in the zone between the base and the point of distribution?

Please explain in detail if possible.

First let us start out by saying that there are no mysterious manipulators out there at least not in the context of us versus them. Pricing levels are no more then records of what someone (anyone) is willing to pay or accept for a particular stock on that particular day. A base is a solid history of well established price level that seems to be stagnant. The pressures of time,space, and volume all work hand in hand to move prices up or down. The ones who are patient enough to buy all along a base from the discouraged ones are actually the manipulators. This could be you and I! Of course there are people with much more money at stake but it is there attitude that makes them a manipulator. You see as the stock is continually picked up at bargain prices along a 2-3 year base or longer it is constantly gaining what is known as technical strength. That is that the amount of stock for sale is drying up. It will have constant fluctuations depending on the stocks particular personality and the patience of those would be manipulators. Decisions to continue to hold or sell because it has been too long all affect price movement.Now there are those who make markets in these stocks to provide liquidity and constant supply. I am sure when they see that the floating (stock that continually is transfered back and forth) supply of stock is drying up, they who have a supply of stock to provide for this occasion begin to charge slightly more for it. This is only right as demand begins to exceed supply, a natural law. It is at this critical juncture that we the public begin to drive the price higher based on our demand for the rising stock. As long as demand exceeds supply it will continue to rise. When supply begins to exceed demand then the price drops or consolidates accordingly.Where and when every person decides along the way to buy and sell is what drives this entire process and the ratio of buyers to sellers determines the trend. Who are the players along the way? We all are. No one entices anyone to buy or sell. The price movement or lack of movement is what causes people to buy or sell. There are just some who are smart enough to realize that the charts are basically giving you all the info you need to know about what the manipulators are doing.Technical strength is strong when the ratio of buyers to sellers is greater. The chart formations tell this very accurately when you spend hours and hours looking at them with this attitude in mind. No man will always be right and the charts can deceive but not too often when you understand the underlying fundamentals. Whoops I said the F word. The fundamentals of chart interpretation. I could write a whole book on this stuff and most people still will not understand the concept because they mainly buy on emotion not pure understanding paid for by many hours of knowledge gathering. The other part that most people don't seem to appreciate and I know TW does not agree with this philosophy but with the recent bear market the same rules apply on the way down as on the way up. Technical deterioration can be easily seen just as well as technical strength. The market is the only place I know of where you can make profits going up or down. However it is only safe using stop loss orders and you must understand what your looking at in reverse. As always this is not an endorsement to trade any securities or endorse any particular trading philosophy. All decisions to enter the market should be your own. I hope this sheds some light and of course it is only one mans humble opinion.

Hope everyone here was listening.

nicely done Jeffrey-

those are the same conclusions i have come to about the mysterious "manipulators". i prefer to think of the whole situation as "strong hands/weak hands". the shakeouts that we see are the prices beginning to rise but defeated by the weak selling off, happy to make a small profit or cut into what was turning into a bigger loss. MHO is the same as yours, Jeffrey. glad to see that my thoughts, right or wrong, at least aren't unique.--------alan

Ditto to Bill's and Alan's comments. Well said Jeff. What I will add is that manipulation does occur. There are numerous stories that are made public, probably a small percentage of what actually occurs. Now, of course, it all depends on your personal definition of manipulation but in most cases it's pretty clear cut.

The thing to realize is that pure "manipulation" is not sustainable. If you are truly in this game to let your profits run and cut your losses short (or simply not even accept a loss as per TW which is my attitude currently, personal choice), the stocks that you are looking for are the ones that Jeff described. The ones with the solid bases, the lack of volume or "interest", the ones where the float is drying up. Those with that technical strength as he calls it, will be the ones that will have the good runs, not the quick spikes which are not lasting and yield little profit over the long run in comparison.

Bill made a comment on his forum that his portfolio suffered less than a 1% drop with yesterday's downslide in the markets. I have been following several portfolio's of TW "type" stocks using various entry methods and my experience mirrors his statement. These bases are solid bases and "strong" stocks are strong no matter the general market condition or sentiment. All in all, they have performed remarkably well amidst chaotic conditions and TW's words show to be true ... one must keep in mind that the portfolios I am following are well diversified ... if one dumps their account into a couple of stocks, then all bets are off ... you'll win big or suffer through some longterm drawdown more often than weathering the storms with little problem.

I still have some testing to do to solidify my personal strategy but with TW as a base of knowledge, I don't think anyone with a little patience can go wrong ...

Take care

dc

For the feedback and the insight, as usual. Much appreciated.

Bill

Yes, but...if "pricing levels are no more then records of what someone (anyone) is willing to pay or accept for a particular stock on that particular day"...then we must assume that those who were doing the accumulating are also doing the selling even on a very small breakout. What causes those breakouts to occur if most of the stock has been accumulated over the years?

Yes, but...if "a base is a solid history of well established price level that seems to be stagnant"...then what causes it to be stagnant?

Yes, but...if "the pressures of time,space, and volume all work hand in hand to move prices up or down"...then how is it that a stagnant stock is now able to move up? It's stagnant for a reason...or is it? It can't be both!

Yes, but...as "the amount of stock for sale is drying up"...then it would be logical to assume that those that are selling in a breakout from a long base are the public. If that were true, then we rely on the public for a stock's upward movement and not the manipulators, especially since we can assume that the manipulators are the patient ones doing the accumulating and are the ones that primarily sell at distribution.

Yes, but...as "the floating supply of stock is drying up" (meaning the accumulators have effectively accumulated) they who have a supply of stock (meaning the accumulators) to provide for this occasion begin to charge slightly more for it." Who are they selling it to, other accumulators, the public, or both? What kind of profits are they making? Seems like waiting years for a based to complete only to sell a few cents or dollars above is not worth the effort??

Yes, but..."as demand begins to exceed supply" what causes the demand? Just because the laws of economics can be quoted does not mean that that's what's actually occuring. If a stock is stagnant, as you have stated, and it based because of its stagnancy, then logic would hold that there appears to be no reason to buy a stagnant stock as demonstrated by years of basing out. What causes the demand? Simple laws of economics do not explain the details. I had Economics 101, too.

Yes, but if... "we the public begin to drive the price higher based on our demand for the rising stock" what caused us (public) to demand a so-called stagnant stock? What's our incentive? Who's recommending a particular stagnant stock? If we follow the teachings of present day brokers, authors, speakers, and investment gurus, we would see that the public is not normally interested in a stock until it reaches the higher levels. A simple read of "Value Line" will show that most stocks recieve a higher rating only when they are building tops. The Beardstown Ladies only bought stocks with positive ratings and usually in the higher ranges. The only reason Ted-heads buy on a breakout is because we see it as an opportunity. But the general public is not normally enticed to buy a so called stagnant stock; whereas, somebody is? Who is that somebody? Who's selling and who's buying, and why?

Yes, but...if it is as you say, that "As long as demand exceeds supply it will continue to rise" then what causes the demand? Are we not to assume that the reason one buys a stock is because he/she believes they will profit from it? If the accumulators are holding most of the stock, what drives the public to believe they can profit from a "stagnant" stock? We must also assume that if a patient accumulator (manipulator) decides to sell in the bottom range that he/she is no longer a manipulator but was something other than a manipultor. Thus, if they were not a true manipulator then they must be a public member, and as the public, would sell at the market vice asking for a higher price. If one asks for a higher price, one may or may not sell their stock, especially if the stock is stagnant.

Now, your previous premises were based on the assumption that everyone is involved in the market at some point and that they have equal push an pull effects based on suppy and demand. But at the end of your disertation, you are now saying that "most people do not understand the concept because they mainly buy on emotion not pure understanding..."

If your conclusion is correct, then we must assume that something must entice the these emotional people to buy stagnant stock. To accept that, we must believe that the public is buying stagnant stock and thus becoming active partipants with the manipulators upon distribution.

My question still stands. I don't think you adequately explained the details.

i'm not one to argue about such things, because i will never claim to be all-knowing. but i will add to my previous statements by incorporating the "manipulators". i still believe that a stock is very hard to manipulate during the accumulation process. the shakeouts would be a very difficult thing to control and why would you want to? you may argue to pick up more stock. well, if i had 10 shares of xyz, and it went up 50-100% every twelve months and i took a profit, wouldn't that be better than owning twice as many(20) shares and waiting three years? along the way you'd also have to "buy up" the price to cause these shakeouts, thereby raising your own average price. now if you were reinvesting your profit on your 10 shares and profiting again in twelve months, you in effect, would own between 33 and 80 shares before the third year run. my math may not be correct, but you get the point. why wait years to get your money when you can leverage all along the way. so, i maintain that shakeouts are an uncontrolled, strong hand, weak hand condition. now, after the strong hands are all holding and the volume has dried up, it would be much easier to manipulate a stock. with supply/demand, i can now certainly see how much easier it would be to "jump start" the stock with a minimum investment, and of course, release the positive news statements, and start a major bull run. while i won't discount the notion of total manipulation, i just find it difficult to believe, and inefficient all at the same time. i guess we may never know, but as long as we can all read the charts with the same basic idea we will be way ahead of the "emotional fundamentalist". here's to being on the same team!---------alan

Alan, I really like the way you think. May or may not be right but the point is that it doesn't matter. Stocks exhibit this behaviour on a repeating basis. The timing changes but the song remains the same.

When Warren Buffett bought silver and the price went up, he didn't liquidate those contracts at a higher price. He took delivery (so much of it that he had to store it in London to avoid problems with market cornering laws are something ... I'm not an expert on the deal).

There's often more than meets the eye with any deal. The stories are out there about manipulation. From Jesse Livermore to Joe Kennedy to the mob and the dot coms and finally a teenager who took over $200k out of the market with the pump and dump. Things have changed since the early days of Ted Warren's trading. But, the charts still look the same ... if you are looking at the long term charts.

Take care

dc

and keep your eye on the prize!----alan

In any traders magazine they talk about the game against the market makers and are the market makers buying at the time etc. - what most long term traders seem to forget - is that the MM's have the ability to change their bid and ask on a whim - the short term traders know this - I have watched stocks move on ZERO volume - the bid and ask moved up for several days with no trades taking place - explain that!