June 22 - Tidbit of the Day

A tiny tidbit today. This from a post on a message board that I frequent. These are the types of games that are played and 99% of people have no idea. This rally we've been enjoying the past 3 months was manufactured, pure and simple. Whether the following describes what actually is happening this time or not is up for debate.

It's a fact that institutions have not been buying and that insiders of companies are actually selling at these levels. Even those within the companies know that the current stock prices can't be maintained and are selling.

As always, be aware of what's going on.

===

In his book “Reminiscences of a Stock Operator” Jesse Livermore describes the process that large institutions sell large quantities of stock. It is the exact process you describe above. Basically small investors love to buy “bargains”, buy the dips. So the large institutions actually buy the stock to raise prices then let the prices fall. This action gets the buy the dips crowd working and the large institutions sell into this. Once the finish selling, and the buy the dips crowd realizes their strategy no longer works they race for the exits and sell the stock back to the larger institutions at much lower prices. This game has been going on for as long as stocks have been traded.