June 15, 2009
As a Ph.D. candidate in Finance and equity market, I would like to contribute my cents too.
To get a true feeling about the market, I have built a very small portfolio focusing on alternative energy and participated in the marketplace since Jan 2009.
During 6 months of close observation, one thing is clear to me, and I firmly believe the equity market is heavily manipulated. The manipulation is going on almost daily. The most obvious manipulation happens at the end of trading session around 4:00PM.
One of my positions was a foreign company (ticker LDK). The degree of manipulation on this stock sometimes is astonishing. This stock has a normal trading size of hundreds, or thousands shares. But at 3:58 to 4:00PM, you often see block selling order size of hundreds of thousands shares, the obvious purpose is to block any potential up movement. Just give you one example, on June 3rd 2009, in order to drive it down by extra 40 cents or so, someone just have to make the market close at 4:04PM. It is also frequently observed, that bidding price if equal or even higher than asking price, yet, the deal was holding down without allowing to go through.
Not accidental, this stock has 44% of floating sold in short for years. Refer to the following link:
http://www.cnanalyst.com/shortinterest/
It is not understandable why SEC is not enforcing laws to make the marketplace a leveled playground. It is even absurd that SEC has not effectively enforced the naked short rules, and allow financial criminals to ruin this market.
disclosure: all liqidated, no long or short position as of today