Market manipulation has its natural limits.
Of the frequent attempts to manage the Phisix higher at the close, I have noted of two major instances were such attempt has failed, one in November 25 and another in December 4.
Today marks the third.
The fundamental barrier will always be scarcity; whether this has been financed by taxpayer money, depositor money, treasury funds from corporations owned by plutocrats and from credit markets or a combination thereof. Other obstacles could be from regulations, access to liquidity, sentiment, sheer volume, et.al.
Notice that such reversals or repulsions on market manipulations have come at a very close space. That’s a sign of the frequency of engagements by stock market operators. It’s also a sign how vulnerable they are ( chart from technistock)
Perhaps stock market operators met their match today. But it didn’t stop them from trying. There was an attempted “afternoon delight” or an afternoon pump, (green square) unfortunately bears retained control of the session especially during the closing moments and “dumped” stocks at the last minute. Stock market operators essentially got a dose of their own medicine…again. Now stocks which they bought at the highs (from previous operations) will signify as floating losses.
Perhaps too that the stock market operators exhausted themselves from the fantastic whole day operations last night.
Yet if operators used levered money for the pump, eventually they might become forced sellers too….when creditors makes a call on their loans.
As one would notice, it doesn't take legal actions to curtail these unscrupulous activities, the laws of economics will serve as their nemesis.
The Phisix eventually succumbed to profit taking down 1.58% on heavier volume than the series of market “pumps”. Declining issues led advancing 108-66 (PSE quote) which has been consistent with today’s downturn.
Today’s domestic market slump has been coherent with the region’s stock market actions.
Just look at the erstwhile sizzling hot record after record breaking Indian stocks. They have NOT decoupled from the meltdown. Both the Sensex and the Nifty were slammed 1.56% and 1.66% respectively today(quotes from Bloomberg). So last week’s breakdown by the SENSEX from the one year trendline seems to have been validated.
Malaysia and Thailand’s bleeding continued today. The KLSE sank 1.38% while the SET which suffered an incredible bout of an intraday crash yesterday closed 1.13% down. Yesterday, the SET collapsed by an astounding 9.2% before recovering to close at down 2.4%
Indonesia’s JKSE dropped 1.61% while Vietnam’s HCM Index plunged 2.33%. South Korean Kospi was clobbered .85% while recent outperformer Singapore’s STI was trounced 2.4%
What you are seeing have been symptoms of a regional meltdown. If these dynamics persist or worsens, then the 1997 scenario could be a model. In 1997, crashing stocks eventually exposed on, or manifested, the region’s economic excesses, which mutated into a crisis.
So unlike stock market operators who see ALL gains and NO risk from the illusions brought about by a credit boom, current dynamics suggests otherwise; a very risk fertile environment susceptible to a crisis.
Of course, no trend goes in a straight line, there will be interim bounces.
Remember, decoupling is a myth. If these are symptoms of deflationary bubble bust, then contagion will be the shared denominator.
As Philosopher George Santayana once warned, those who cannot remember the past are bound to repeat it
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