May 11, 2009
I have watched and traded the markets for over 20 years. While I cannot pinpoint what is causing the problems, I am absolutely convinced the markets can be manipulated by larger institutional traders on any given day, particularly lower volume days. More and more of my friends have quit trading the markets because they do not trust the the market anymore.
If you want to restore convince in our US stock market with the smaller trader or investor, you have to put more control over the Goldman Sach's and other very successful largest institutional trading rooms so they cannot continue to basically legally steal money from the weaker traders who have to put in tight stops to protect wisely their investments.
One way you can stop game playing is to require full disclosure and publish who is playing the biggest orders and how long those positions are held. The largest players will not like this but having this kind of information becoming public knowledge will reduce the number of times game playing goes on where larger traders effectively use their size to manipulate their desired objective.
IF you want to grow the market and return it to stability, put more control and regulation on the largest institutions and make their data more publically known. Reenacting the uptick rule is a psychological thing that needs to happen, but don't stop there, put more regulation in place so us little guys who work extremely hard trying to make a good investment are not constantly screwed by the big boys. It destroys confidence is capitalism.