From Dove To Hawk And Back To Dove; Bernanke Moves Markets

Question: How do you make stocks and bonds rise in price at the same time and increase the wealth of the investor class?

Answer: You declare your intent to buy $85 billion of bonds and mortgages every month for a considerably extended period as a way to maintain the lowest rates of interest in recent history.

Question: How do you drive the price of stocks and bonds lower at the same time, reducing the wealth of the investor class, and threatening the housing recovery?

Answer: You announce your intention to introduce tapering and reduce the amount of bonds and mortgages you are buying every month, with the intent of ultimately ceasing such purchases completely at some uncertain date in the future.

Question: How do you correct(reverse) the intent to begin phasing out quantitative easing in the light of stock and bond markets reacting in an overly negative manner that threatens the economic recovery?

Answer: You announce that you may indeed reduce the dollar amount of bonds and mortgages you are buying, but not right away. And you will certainly not be increasing the interest rate for borrowing money in the foreseeable future, or most certainly not until the unemployment rate falls from 7.6% to 6.5%.

Question: What do you do if the latest attempt at manipulation (changing signals) may not be sufficiently convincing. After all, the yield on the 10 year Treasury note is close to its recent peak of 2.70%. The cost of a mortgage has backed up as well.

Answer: You strongly hint that even if the U.S. unemployment rate falls to 6.5%, the Fed may well, probably will, keep interest rates near zero. This is a major revision to what Bernanke has been positing ever since May 22nd, when bond traders began getting net short Treasuries. They meant to coin profits in the instant spike in interest rates.

Hint; this promise might require Bernanke to remain at the helm of the Fed for the near or medium term future, so as to personally steer this, mind you, absolutely fresh, new, dramatic change in policy. It underscores just how dreadfully unpleasant the past few weeks of interest rate hikes have been for Bernanke & Co. The unanticipated negative reaction around the world was not helpful for recovery in either the U.S. or Europe or China.

Question: What can we expect Bernanke to do over the remainder of 2013?

Answer: Divide tapering into two parts, the process of buying securities and the hiking of interest rates. Now that he has awoken to the risks in giving weight to the hawks on the Fed board, Bernanke will assert himself more on the dovish side of monetary policy, so that all the good works since 2009 will not be debilitated in any manner. A very tricky business with ramifications for all of us. I must say that I’d rather have Bernanke handling this tricky balancing act than some more unknown economist. Maybe he could bring the exceptionally wise Stanley Fischer, Bernanke’s PHd. adviser at MIT in 1979 and the retiring head of the Bank of Israel, back to Washington to help oversee the transition in monetary policy.

Question: What has Bernanke, and therefore we concerned citizens, learned from the crisis of 2008 and the meltdown in the markets as it damaged economic growth?

Answer: The lesson learned, Bernanke told the National Bureau of Economic Research gathering was a measure that “had been forgotten to some extent… severe financial instability can do grave damage to the broader economy.” The maintenance of financial stability is “coequal with the responsibility for the management of monetary policy.” The Fed must integrate the two. So, we will watch and wait to see how integrating the two, financial stability and the management of monetary policy, go the next 6 months. Pray, beautifully well, we hope. Source: HERE
 

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Who Secretly Controls The Money Supply Of The Entire Globe?

Michael Snyder: An immensely powerful international organization that most people have never even heard of secretly controls the money supply of the entire globe.  It is called the Bank for International Settlements, and it is the central bank of central banks.  It is located in Basel, Switzerland, but it also has branches in Hong Kong and Mexico City.  It is essentially an unelected, unaccountable central bank of the world that has complete immunity from taxation and from national laws.  Even Wikipedia admits that “it is not accountable to any single national government.“  The Bank for International Settlements was used to launder money for the Nazis during World War II, but these days the main purpose of the BIS is to guide and direct the centrally-planned global financial system.  Today, 58 global central banks belong to the BIS, and it has far more power over how the U.S. economy (or any other economy for that matter) will perform over the course of the next year than any politician does.  Every two months, the central bankers of the world gather in Basel for another “Global Economy Meeting”.  During those meetings, decisions are made which affect every man, woman and child on the planet, and yet none of us have any say in what goes on.  The Bank for International Settlements is an organization that was founded by the global elite and it operates for the benefit of the global elite, and it is intended to be one of the key cornerstones of the emerging one world economic system.  It is imperative that we get people educated about what this organization is and where it plans to take the global economy.

Sadly, only a very small percentage of people actually know what the Bank for International Settlements is, and even fewer people are aware of the Global Economy Meetings that take place in Basel on a bi-monthly basis.
These Global Economy Meetings were discussed in a recent article in the Wall Street Journal…

Every two months, more than a dozen bankers meet here on Sunday evenings to talk and dine on the 18th floor of a cylindrical building looking out on the Rhine.
The dinner discussions on money and economics are more than academic. At the table are the chiefs of the world’s biggest central banks, representing countries that annually produce more than $51 trillion of gross domestic product, three-quarters of the world’s economic output.

The article goes on to describe the room that these Global Economy Meetings are held in.  It sounds like something out of a novel…

The Bank of England’s Mr. King leads the dinner discussions in a room decorated by the Swiss architectural firm Herzog & de Meuron, which designed the “Bird’s Nest” stadium for the Beijing Olympics. The men have designated seats at a round table in a dining area scented by white orchids and framed by white walls, a black ceiling and panoramic views.

The central bankers that gather for these meetings are not there just to socialize.  No staff members are allowed into these meetings, and they are conducted in an atmosphere of absolute secrecy…

Serious matters follow appetizers, wine and small talk, according to people familiar with the dinners. Mr. King typically asks his colleagues to talk about the outlook in their respective countries. Others ask follow-up questions. The gatherings yield no transcripts or minutes. No staff is allowed.

So the fate of the world economy is determined by unelected central bankers in secret meetings that nobody ever hears about?
That certainly does not sound very “democratic”.
But this is the direction that “global governance” is taking us.  The elite believe that the “big decisions” are far too important to be left “to the people”, and so most of the “international institutions” that have been established by the elite operate independently of the democratic process.
Sadly, the truth is that all of this has been planned for a very long time.
In a recent article entitled “Who Runs The World? Solid Proof That A Core Group Of Wealthy Elitists Is Pulling The Strings“, I included a quote from Georgetown University history professor Carroll Quigley from a book that he wrote all the way back in 1966 in which he discussed the big plans that the elite had for the Bank for International Settlements…

[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.

Back then, the Bank for International Settlements was only just starting to play a major role in global affairs.  But over the years the BIS began to become increasingly important.  The following is an excerpt from an article by Ellen Brown…

For many years the BIS kept a very low profile, operating behind the scenes in an abandoned hotel.  It was here that decisions were reached to devalue or defend currencies, fix the price of gold, regulate offshore banking, and raise or lower short-term interest rates.  In 1977, however, the BIS gave up its anonymity in exchange for more efficient headquarters.  The new building has been described as “an eighteen story-high circular skyscraper that rises above the medieval city like some misplaced nuclear reactor.”  It quickly became known as the “Tower of Basel.”  Today the BIS has governmental immunity, pays no taxes, and has its own private police force.  It is, as Mayer Rothschild envisioned, above the law.

Yes, it most definitely does bear a striking resemblance to the Tower of Babel as you can see from the photo in this article.  Once again the global elite are trying to unite humanity under a single system, and that is most definitely not a good thing.
But many of these elitists are entirely convinced that “global governance” is what humanity desperately needs.  They even publicly tell us what they plan to do, but most people are not listening.
For example, the following is an excerpt from a speech that former president of the European Central Bank Jean-Claude Trichet delivered to the Council On Foreign Relations in New York…

In the area of central bank cooperation, the main forum is the Global Economy Meeting (GEM), which gathers at the BIS headquarters in Basel. Over the past few years, this forum has included 31 governors as permanent members plus a number of other governors attending on a rotating basis. The GEM, in which all systemic emerging economies’ Central Bank governors are fully participating, has become the prime group for global governance among central banks.

The speech was entitled “Global Governance Today”, and you can find the full transcript right here.  But most people have never even heard that such a thing as a “Global Economy Meeting” even exists because the mainstream media rarely discusses these sorts of things.  They are too busy focusing on the latest celebrity scandal or the latest cat fights between the Republicans and the Democrats.
If you go to the official BIS website, the purposes of the organization sound fairly innocent and quite boring…

The mission of the Bank for International Settlements (BIS) is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.
In broad outline, the BIS pursues its mission by:

• promoting discussion and facilitating collaboration among central banks;
• supporting dialogue with other authorities that are responsible for promoting financial stability;
• conducting research on policy issues confronting central banks and financial supervisory authorities;
• acting as a prime counterparty for central banks in their financial transactions; and
• serving as an agent or trustee in connection with international financial operations.

The head office is in Basel, Switzerland and there are two representative offices: in the Hong Kong Special Administrative Region of the People’s Republic of China and in Mexico City.

But when you start looking into the details, things get much more interesting.
So exactly how does the BIS achieve “monetary and financial stability”?  An article posted on investorsinsight.com described how this is accomplished…

It accomplishes this through control of currencies. It currently holds 7% of the world’s available foreign exchange funds, whose unit of account was switched in March of 2003 from the Swiss gold franc to Special Drawing Rights (SDR), an artificial fiat “money” with a value based on a basket of currencies (44% U.S. dollar, 34% euro, 11% Japanese yen, 11% pound sterling).
The bank also controls a huge amount of gold, which it both stores and lends out, giving it great leverage over the metal’s price and the marketplace power that brings, since gold is still the only universal currency. BIS gold reserves were listed on its 2005 annual report (the most recent) as 712 tons. How that breaks down into member banks’ deposits and the BIS personal stash is unknown.
By controlling foreign exchange currency, plus gold, the BIS can go a long way toward determining the economic conditions in any given country. Remember that the next time Ben Bernanke or European Central Bank President Jean-Claude Trichet announces an interest rate hike. You can bet it didn’t happen without the concurrence of the BIS Board.

In recent years, it has become increasingly obvious who really has power over our economy.
When Barack Obama speaks, the markets usually move very little.
When Ben Bernanke speaks, the markets often respond with wild gyrations.
A recent CNBC article entitled “Central Banks: How They Are Ruling the Financial World” detailed the enormous impact that central banks had on the global financial system during 2012…

In all, 13 other central banks in the world have followed the Fed’s lead and set interest rates at or near zero in an effort to keep the liquidity spigots open and prop up their ailing economies. Those 14 economies represent a staggering $65 trillion in combined equity and bond market capitalizations, according to Bank of America Merrill Lynch.

Later on in that same article, the author discussed the enormous amounts of money that global central banks were creating out of thin air…

“When you add up all the central banks in the world, it’s going to be over $9 trillion,” said Marc Doss, regional chief investment officer for Wells Fargo Private Bank. “That’s like creating the second-largest economy in the world out of thin air.”
Indeed, central banking has become an economy unto itself, a multi-trillion-dollar empire that massages and manipulates markets, which respond to the slightest news out of the respective entities’ policy making committees.

So who controls the money?
The central banks of the world do.
And who controls those central banks?
The Bank for International Settlements does.
If we don’t like what the Bank for International Settlements is doing, can we do anything about it?
Nope.  The Bank for International Settlements is above the law…

Maybe we’d feel better about the BIS if it were more transparent, but most everything about it, including its bi-monthly member and board meetings, is shrouded in secrecy. And perhaps more worrisome is that the BIS is free from oversight. By rights granted under its agreement with the Swiss Federal Council, all of the bank’s archives, documents and “any data media” are “inviolable at all times and in all places.” Furthermore, officers and employees of BIS “enjoy immunity from criminal and administrative jurisdiction, save to the extent that such immunity is formally waived . . . even after such persons have ceased to be Officials of the Bank.” Finally, no claims against BIS or its deposits may be enforced “without the prior agreement of the Bank.”
In other words they can do whatever they want, without consequences. How’s that for a leak-proof legal umbrella?

If the BIS wants to “intervene” in the financial markets, they simply just do it.
If the BIS wants to bail out big banks or even entire nations, they simply just do it.

The BIS reminds me of this old joke…
Q: Where does an 800 pound gorilla sit?
A: Anywhere it wants to.

So what is next for the Bank for International Settlements?

Well, many have speculated that eventually the goal is to have just a single global currency which will be administered by a single global central bank.  The BIS is already using Special Drawing Rights (SDRs), which are considered to be a precursor to the coming global currency.  The BIS played a big role in the adoption of the euro, and more currency integration is almost certainly on the way in future years…

But in the end, how you feel about the BIS may come down to how you feel about a one-world currency. The bank was a major player promoting the adoption of the euro as Europe’s common currency. There are rumors that its next project is persuading the U.S., Canada and Mexico to switch to a similar regional money, perhaps to be called the “amero,” and it’s logical to assume the bank’s ultimate goal is a single world currency. That would simplify transactions and really solidify the bank’s control of the planetary economy.

But if the United States ever did give up the U.S. dollar, it would be a massive blow to our national sovereignty. When someone else controls your money, it doesn’t really matter that much who makes the laws. Unfortunately, the global elite seem absolutely obsessed with the idea of a global currency, a one world economic system and a global government.
None of those things will happen this year, but that is where we are moving.  With each new crisis that arises, the solutions that we will be given will always involve more centralization and more globalization.

So what do you think about all of this?

Source: http://etfdailynews.com
This article is brought to you courtesy of Michael Snyder from The Economic Collapse Blog.

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How SEC Investigations Work

First and foremost, the SEC is a law enforcement agency. The Enforcement Division assists the Commission in executing its law enforcement function by recommending the commencement of investigations of securities law violations, by recommending that the Commission bring civil actions in federal court or before an administrative law judge, and by prosecuting these cases on behalf of the Commission.

As an adjunct to the SEC's civil enforcement authority, the Division works closely with law enforcement agencies in the U.S. and around the world to bring criminal cases when appropriate.The Division obtains evidence of possible violations of the securities laws from many sources, including market surveillance activities, investor tips and complaints, other Divisions and Offices of the SEC, the self-regulatory organizations and other securities industry sources, and media reports.

All SEC investigations are conducted privately. Facts are developed to the fullest extent possible through informal inquiry, interviewing witnesses, examining brokerage records, reviewing trading data, and other methods. With a formal order of investigation, the Division's staff may compel witnesses by subpoena to testify and produce books, records, and other relevant documents. Following an investigation, SEC staff present their findings to the Commission for its review. The Commission can authorize the staff to file a case in federal court or bring an administrative action. In many cases, the Commission and the party charged decide to settle a matter without trial.

Common violations that may lead to SEC investigations include: Misrepresentation or omission of important information about securities Manipulating the market prices of securities Stealing customers' funds or securities Violating broker-dealers' responsibility to treat customers fairly Insider trading (violating a trust relationship by trading on material, non-public information about a security) Selling unregistered securities.

Whether the Commission decides to bring a case in federal court or within the SEC before an administrative law judge may depend upon various factors. Often, when the misconduct warrants it, the Commission will bring both proceedings.

• Civil Action: The Commission files a complaint with a U.S. District Court and asks the court for a sanction or remedy. Often the Commission asks for a court order, called an injunction, that prohibits any further acts or practices that violate the law or Commission rules. An injunction can also require audits, accounting for frauds, or special supervisory arrangements. In addition, the SEC can seek civil monetary penalties, or the return of illegal profits (called disgorgement). The court may also bar or suspend an individual from serving as a corporate officer or director. A person who violates the court's order may be found in contempt and be subject to additional fines or imprisonment.

• Administrative action: The Commission can seek a variety of sanctions through the administrative proceeding process. Administrative proceedings differ from civil court actions in that they are heard by an administrative law judge (ALJ), who is independent of the Commission. The administrative law judge presides over a hearing and considers the evidence presented by the Division staff, as well as any evidence submitted by the subject of the proceeding. Following the hearing the ALJ issues an that includes findings of fact and legal conclusions. The initial decision also contains a recommended sanction. Both the Division staff and the defendant may appeal all or any portion of the initial decision to the Commission. The Commission may affirm the decision of the ALJ, reverse the decision, or remand it for additional hearings. Administrative sanctions include cease and desist orders, suspension or revocation of broker-dealer and investment advisor registrations, censures, bars from association with the securities industry, civil monetary penalties, and disgorgement.

Official Source SEC Site http://www.sec.gov/news/newsroom/howinvestigationswork.html

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SEC Orders DTC to Adopt Fairness Procedures on Suspensions

By David Feldman at 19 March, 2012, 9:26 am

Last Thursday, the SEC ruled In the Matter of the Application of International Power Group, Ltd. for review of action taken by Depository Trust Company or DTC. When the SEC started a case alleging, among other things, sales of unregistered securities by IPG (but neither IPG nor its officers or directors were named), the DTC suspended its electronic trading capability. Two years later the SEC has now ruled.

Essentially, the SEC ruled that IPG is a “person” entitled to a fair and orderly procedure, including a hearing and the opportunity to appeal the matter to the SEC, with respect to the suspension. DTC tried to argue that IPG, since it is not a broker-dealer “participant,” was not a “person.” They also ruled that DTC “did not provide IPG with adequate fair procedure in connection with the suspension.”

More importantly, the Commission also directed DTC to “adopt procedures that accord with the fairness requirements of [the Securities Exchange Act] , which may be applied uniformly in any future such issuer cases.”

This ruling is good news for issuers facing a so-called DTC “chill.” It is now clear they have standing to insist on a proper and fair hearing, and the chance to appeal to the SEC if they are not satisfied.

> Summary News: http://www.reversemergerblog.com/2012/03/19/sec-orders-dtc-to-adopt-fairness-procedures-on-suspensions/

Commission Remands Proceeding Involving DTC'S Suspension of Services With Respect To Issuer's Securities 

The Commission has remanded to the Depository Trust Company ("DTC") an appeal by International Power Group, Ltd. ("IPWG") of DTC's suspension of clearance and settlement services with respect to IPWG's securities. The Commission found that IPWG was entitled to Commission review of DTC's action and that DTC did not provide IPWG with adequate fair procedure in connection with the suspension. The Commission remanded the proceeding for a fair procedure and the development of the record in accordance with the Commission's opinion. (Rel. 34-66611; File No. 3-13687)

> Opinion Court Doc: www.sec.gov/litigation/opinions/2012/34-66611.pdf

> SEC News Source: www.sec.gov/news/digest/2012/dig031512.htm

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Market Maker Speaks Out: Ways of a Market Maker

I was an OTC MM for about 10 years ending in the late 80's. Since then I have been strictly an investor. Since I have not been that up to date in MM rules I will only make statements that I feel fairly confident are still accurate regarding these activities. By and large most MM don't have a clue nor do they care to learn, about the fundamentals of the stocks they trade.

They just try to make orderly markets. When dealing with BB stocks it is very easy for a MM to get trapped into being short in dealing in a fast moving market. Reason being; most of the MM's in this stock are what are called "wholesalers" this means they don't have retail brokers "working" the stocks.

So they have to rely on what's known as the "call" from larger retail houses. If a "Big" retail firm like an E-trade calls up a market maker to purchase say 5,000 shares of a stock, they expect to get an "execution" from that market maker. If he turns them down, or only gives a partial then the "Big" firm will go to another MM.

If this second MM "fills the order" then that "Big" firm has a moral obligation to continue to give future "business" in that stock to that MM who performed (his life blood). This will go on until he "fails" to perform and so on.

Contrary to popular opinion the "Big" firms Do NOT neccessarily go to the "Low Offer" to fill a buy order (Or high bid for a sell). They "Go" to who they think will perform to fill the order and expect that MM to "match" the "low offer" in the case of a buy (bid in the case of a sell). Even though this MM might in fact be the "high bid" and not really want to sell any more.

As a wholesaler he must perform or he will get a reputation as a "non-performer" with the "Big" houses and will cease getting "calls" which means he will soon go out of business. I mentioned above that this activity is very significant to BB stocks. I say this because most of the trades in these BB stocks are "unsolicited" and are done through discount houses.

With the above groundwork laid, let me try to explain how market makers get short even if they like the Company; Lets say that a stock (shell) has been lying quietly at $.25 bid $.50 offered. A limit order comes into one of the MM's to Buy at $.50 for a thousand shares. Prior to this trade that MM may be "flat" (neither long or short any shares). He fills the order and is now short 1,000 shares. He may raise his bid hoping to find a seller to "flatten" out his position. But before he realizes it a wave of buyers have come in and cleared out all the $.50 offers. Now the stock is $.50 bid .75 offered. Here comes that "Big" firm he just sold the 1,000 shares to at .50 with another bid for 1000 at .75. He makes this print. Now he is short 2,000 at an average of .625. The market keeps moving and now its .75 bid 1.00 offered. Now he has to make a decision.

Just like investors, MM Hate to take a loss. So 9 times out of 10 he will now sell 2000 at 1.00 making him short 4000 but with an average .81. At this time he would love to see a seller at .75 so he can cover his short and make a few bucks.

But instead the market keeps moving up. Now it is 1.00 to 1.25 and here comes the buyer again at 1.25. He doesn't want to lose the call so now he needs to sell 4,000 at 1.25 to keep his break even point above the bid. Now he is short 8,000. Market moves up to 1.25 bid 1.50 offer here comes the buyer now he feels he must sell 8000 here because "stocks don't go up forever".

Now he is short 16,000. And so on and so on. If the stock keeps moving up, before he realizes it he could be short 50k or 100k shares (depending how big his bank is). _________________________

Finally the market closes for the day and on paper he may look all right in that his "break even" price may be around the closing price. But now he has to figure out how to entice sellers so he can cover this short. It is important to note that if this happened to one MM it has probably happened to most all of them.

Some ways MM's entice sellers; Run the stock up with a "tight spread" in a fast market, then "open" up the spread to slow down the buying interest. After it has "cooled off" for a little while lower the offer below the last trade right after a small piece trades on the offer then tighten the spread so that the sellers feel they can take a "quick profit" by "hitting the bid" on the tight spread.

Once the selling starts the MM's will walk it down quickly by only making small prints on the way down with the tight spread. Another way is by running the stock up in the morning, averaging up their short then use the above technique to walk it down in the afternoon.

Hopefully after doing this for several days, it will demoralize the buyers. The volume will dry up and the sellers will materialize thinking that the game is over.

Contrary to popular opinion, MM usually Do Not Cover in Fast moving markets either Up or Down if they are short. They Short More. They usually try to cover after the frenzy is out of the market. There are many other techniques they use but the above are the most popular.

This technique works about 9 times out of 10 particularly in a BB market. However that is because 9 out of 10 BB stocks are BS. Remember what I said above. Most MM's don't have a clue as to the value of a Company until they get trapped. If the Company has solid fundementals and a bright future. Then the stock will do very well. And the activity that caused the situation will prove to even help the future stock activity because it created an audience."

Market Maker's Operating Procedure


The savvy long-term investors never chase stocks up. For the most part that is momentum players and daytraders where most of it or what follows is dumb money. Instead the long-term investors use a couple of simple strategies in order to position themselves. One is to find a stock no one immediately sees has huge potential and accumulate. Long-term investors are not interested in trading against the public mind or the dumb money. That's where the majority of the money can be made but even more can be made if the base of a stock is held extremely strong by investors. However the second is not to doubt the research which is the underlying basis for going long and holding.


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 nitch 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. 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 $83 or at $0.23. 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 and the NASD is not going to do anything about it. They are merely making the market liquid is there reasoning.


The market makers have created an added complication to the OTCBB's 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. That makes absolutely no sense what so ever. They feel a large percentage of trades in the OTC BB 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 are supposed to be doing that no 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 mark or percent from where the stock started. Could be 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. 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, but a recent SEC investigation tells another story.

MMs have a vast resource of tactics and it would take probably more than my 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 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.

"Market Maker Speaks Out: "Ways of a Market Maker" 
Author: Unknown  

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When To Buy & When To Short Sell

Posted by Timothy Sykes on Wed 28th of Jul, 2010 08:14:46 PM

Ok, Ok, you don’t want to read 3,000 blog posts, let alone 150, so I’m going to try to condense 11 years of trading into some simple but powerful rules:



When To Buy A Stock:
-It is breaking out to new highs on strong volume
-The breakout coincides with important news: great earnings, a new product launch, a contract win, FDA approval, etc.
-A breakout in the afternoon above morning highs and ideally some mid-day consolidation
-The stock closes that day of the breakout strongly not weakly

When To Short Sell A Stock:
-The stock is up far too much too quickly and now the volume and chart pattern have begun fading
-The catalyst for the up move is not fundamentally sound, ie: newsletter mentions, momentum trader buying
-The stock has broken a key technical level on both an intraday and multi-day basis
-Early short sellers have already been squeezed on past spikes

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Teaching People To Laugh & Profit From The Joke That Is Wall Street!

Timothy Sykes turned $12,000 into $2 million in four years, lost 1/3 of it, starred in the hit TV show Wall Street Warriors and is now committed to teaching everyone, finance freaks and normal people alike, to profit from the world’s trashiest stocks, penny stocks through his publishing company BullShip Press, LLC (seriously).

This is part of the stock market that is filled with hype, manipulation and corruption and once you learn how to identify all the players and the games they play, which surprisingly isn’t very difficult, you can make some serious money with little risk. The key is learning discipline and not getting too cocky from all the money you make! (seriously)

This ain’t no get-rich-scheme, it’s the first brutally honest blog, book (An American Hedge Fund), instructional DVD packages and subscription services focused on teaching the risks AND rewards of penny stock trading, No more financial BS.

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Why choose to learn from Tim?

3. With so many trading services and mentors available, why do you choose to learn from Tim?
Here’s some of the some of the 760 answers (all the answers are too long to copy & paste, but these 200 give you a general idea):
he seems to be a nice trustworthy individual
No bullshit with evidence, number one, and entertainment
Learn from the best…his stats reflect
He’s honest, humorous, young and not as “stuck up” as others offering trading advice
great reputation
seems to post real and complete information
I viewed a segment on “the street” and liked him
i hear he’s the best
The testimonials are astounding. He is confident and concise in his explanations and is obviously successful himself.
I have not chosen Tim yet, so we’ll see…
track record and appeared to be honest
consistent gains
he sounds so genuine. He talks about profits and loss, doesn’t BS like others
best of the best
I like how RAW you are.
Proven track record (Covestor). Good picks (ie only the ideal ones). Keeps it lighthearted. Repeats the basics (cuz beginners like me forget them). TIMalerts relatively cheap
Your Success Tim. Not sure of others
he is a no BS kind of dude
Tim has shown a successful track record and is honest.
I haven’t chosen yet
good verifiable track record
so far, seems to be the most succesfull style
Tim keeps it real. No fluff. Tim makes mistakes and acknowledges it, instead of hiding it.
spreading my learning capability around to experience different techniques and styles.
Performance
Friend
Honesty; successful and transparent.
Tim is around my age…. younger generation represents
no bullshit?
Tim speaks to the poor people who are just getting started. The strategies you see on cnbc and such are helpful, but those are usually targeted at investors with lots of money. I am very young, 21 to be exact and can take lots of risk because i have my whole life to make up what i lose plus speculation has the biggest reward.
He started small and made millions.
He seemed a no nonsense guys and inspires to learn from his success and failure. Wants people to educate themselves.
he seems to be trustworthy
Tim keeps it real. No fluff. Tim makes mistakes and acknowledges it, instead of hiding it.
great results and he doesn’t make excuses when he make a rare bad stock pick
Because his methods are easy to understand. People are able to duplicate his success.
Tim cuts through all the bullshit and provides down to earth “street” knowledge
affordable and successful, and easy to learn
took a chance
i don’t know, good question.
He’s well-known and knowledgeable.
Easy – Proven Track Record
famous for doing not writing (see dennis gartman).
proven
proven track record
audited results, etc
Tim seems genuine and it shows
RECOMMENDED BY A FRIEND
Performance.
He is in my list with dozen more. He is direct and against system…so is worth a read
I saw the flame in his eyes, the passion, the drive to succeed…these are signs of a succesfull business man. And we have an proverb back home,you are what your friends are
Not too many people mentoring on penny stocks.
younger people have more energy
His numbers. Going from 12,000 to over a million in 4 years was very inspiring.
Cuz his sh*t works…
I love your spark for telling the truth. Met you Live on CNBC “on the money” for the first trading contest they ran.
trading style
I like his no bs attitude. Penny stocks are brutal, so I am looking for straight truth advice
He was just starting and I thought it would be good to get in the ground floor. I like the fact it is kind of shoot from the hip, like this text box, it should be a bigger box and you should be able to see what you have typed!!
Tim has proven that he is the best.
His track record.
A couple of key reviewers (I forget their names and web sites) were at first skeptical but then had good things to say
he’s funny
track record, market differentiation (everybody is covering stocks > $10)
asdf
Just started trading, and found this service first when i began trading.
The idea makes so much sense. Also, the transparency of the trades and alerts.
Proven track record, brutally honest, approach is in-line with my own thinking.
I feel he is one of the most honest in this racket of a business. He has a huge ego but his results can’t be denied.
I learned about Tim from Wall Street Warrior (a TV series) and I believe he is good
his honest approach. his simple strategy. the fact that it is ideal for small accounts. the fact that he can be related to as a person. and An American Hedge Fund telling a great story of rags to riches.
proven results
Good reputation
you can see him and notice his honesty and realism
potential gains
His proven track record and trasnparency
Seems real, walks the walk.
Hey, what kind of survey is this? Questions or leading questions?
No Frills, Just Trade
top rated
Tim puts things into a very good perspective. Its all understanding the wave and the ability to ride it.
Tim is young energetic and smart
I watched on WSW and used to go to his website before he started over with his 12k…back when he had the blue looking website…u cant argue results either
Because he’s honest and the method appeals to me.
You have a proven track record.
Daily updates and timely trade info
An interview I saw TheStreet.com
Tim is one of the only montors I have run across who is fully transparent in his and his follower’s gains (and losses. So I was able to see the strategy at work and make an informed decision.
I liked what he had to say on TDI podcast and his results that are posted on his site
TIm has a no BS approach that is totally transparent
he’s the most fun.honest too!!!!!!!!!!!!!!!!!!
Success in trading track record
Tim Sykes appears to be on the up-and-up. A nice change!
I’ve been tracking Tim and I find him to be truthworthy
If what he publishes is true, one can see what he has done.
When you understand the methods and strategies they make 100% sense
Price reasnable to try. Track of his stock buys / sells is available online which makes it to believe
No BS
it is unique, conservative, disciplined, and it works!
he is champion anf real trader. his methods is simple perhapce successful
I’ve purchased your DVD’s and have been following you long enough to know that you’re real; I’ve tried others and have not been impressed.
Tim is amoung a couple. Seemed to catch my thought process. (how to take advantage of other peoples GREED and foolishness)
the philosophy of capitalizing on pumpers made sense
#1 on Covestor
Entertainment
His history of success
Have read enough about to have the confidence in him.
your honisty
Because his record speaks for itself
Transparent, reputable, and acknowledges his mistakes
His lifestyle and the way he reacts and chooses to do things reminds me of myself in every way.
track record
Because he is the KING
He’s a CNN expert
Heard about him through Yaro Starak
I’ve read the book, I traded many of the same stocks, and also made/lost a fortune in the markets
different strategy
he’s a trader himself and wants to actually help the small guy.
I’m able to understand his teaching methods
he’s seem the most passionate
Hes the best
Even though Tim seems arrogant, if he can produce the way he does then he is someone worth learning from.
It seems to work
consistant results, a successful trading history. Tims stratagy showing the ability to start with relatively small sums of money. And he’s my age, if he can do it so can I.
knows his stuff, helps others
One of many sources
Because he is by far the most upfront and “transparent” with his trades. He seems like he really wants to make other people money and not just himself.
seems genuine
because he has nice hair
good reputation
because Deelina is hot
unique method and record
I was focusing energy to find a mentor. Came across Tim’s material and gave it a shot. We are similar..B-days are close, Left-handed…love pretty women..lol
energetic,young and confident and smart. it doesn’t matter what people say about him, you don’t make $2 mil by the time you are in your 20s and not be smart. he keeps it real and wants to help the small people
I watched Tim’s video last Friday (on-demand since I missed it live), and really like his personality. He’s a straight shorter and has a proven track record.
Fresh point of view.
because of his brutal honesty, humor, & obious tallent
I chose Tim because he’s a dreamer with a big mouth. If he can do it, so could I. ALSO, he’s a decent guy, and I trust his warts-and-all attitude.
1) Transparency. I can follow previous trades to see judge consistancy. 2) Simplicity. I don’t have to go crazy screening or watching vague macro trends and juggling too many indicators to know what plays to focus on
Tim is unorthodox and thinks outside the box
interesting sales technique
Proven Track Record.
Ive always wanted to trade stocks. Ive never before found a method that makes as much sence to me.
He’s successful and has learned from his mistakes
i dont, but i respect his strategy and no-nonsense attitude
I could easily verify that pennystocking works, unlike other sevices that offer vague promises of riches
The proof is in the results that can be shown
He’s on top of today’s market, and is all about NO BS!

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