Janice Dorn, MD, PhD
Neuropsychological Trading Coach
Janice Dorn, M.D., Ph.D., has been a full-time futures trader since 1994. Doctor Janice holds an M.D. in psychiatry and is board-certified by the American Board of Psychiatry and Neurology in general psychiatry and addiction psychiatry. She holds a Ph.D. in brain anatomy. A graduate of Coach University, she is a pioneer market psychiatrist and financial neurobehaviorist. Doctor Janice has written over 500 articles on the financial markets and coached over 600 traders worldwide. She is the Global Risk Strategist for Ingenieux Wealth Management Group, Sydney, Australia.
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Let's talk about market manipulation. Let us assume that the markets have always been under the influence of manipulation, and the only thing that has changed it that we now have the mechanisms/tools with which to discern this.
Pick any chart...it doesn't matter if it is stock, bond, currency, commodity or anything else that trades on the major exchanges. The ebbing and flowing of price and volume over time is nothing more than a repeating pattern of manipulation.
Though cycle after cycle, the big money, smart money or savvy investors and traders "decide" that something has been depressed or beaten down too long and it is time to begin accumulation. Warren Buffet and the so called deep value big money investors step in quietly at first and begin to build up positions.
With the passage of time, combined with subtle and not-so-subtle promotion tactics, the general public begins to find these issues desirable and they step in and buy. Demand now begins to outpace supply. Demand begets demand and now everyone wants to own some. Price rises and continues to rise and the little guy gets hungrier and hungrier. There is now a raging bull market in these issues. Slowly and with great facility, the manipulators relieve themselves of their shares as more and more people climb on, trying to get in on this incredible situation. It can't go down. It's going parabolic. It's going to the moon so you have to jump in now before it's too late.
Oops.
During all this time, the manipulators who bought at rock bottom are slowly and steadily selling to Joe Six-Pack who is standing in line to buy, like a lamb to the slaughter.
Suddenly it stops, and the manipulators go off into the sunset and their newly furbished yachts, leaving the people who came late to the party wondering what happened and why the price is starting to fall.
This may seem cruel and unfair, and maybe, at some level it is--especially for top tickers left holding the bag and now desperate to sell at any price as the tower of greed collapses.
Yet, it is in the nature of all markets to move in bull and bear cycles and this manipulation is a large part of the dynamic of this phenomenon. Manipulation makes markets orderly. It defines support and resistance and trends and orderliness within chart patterns. It can be said that everything that is known about an issue, including every bit of fear and greed is seen within each tick. Without manipulation, there would be chaos, and technical analysis would be an exercise in futility.
Not part of this article, but critical to making distinction is the difference between market manipulation and market intervention.
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