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Xtremepicks Alerts
Posted On: 07/31/2013 7:33:31 AM
Post# of 89345
Posted By: albarf

This tactic shakes out day traders, momentum traders or swing traders who are considered “weak” holders and who will not hesitate to sell at the slightest hint of a turnaround or profit-taking. With the market makers “stomping on the ask” and “walking it down” by continually lowering their selling price, they also drive the bid down. It may even fall below what people were eagerly buying them at. Before too long, the weak hands join in the selling and increasing volumes provoke even more “panic” selling. The market makers are usually aware of when the stock finds a bottom and replenishes their stock or cover their shorts at the bottom. Those market makers who shorted at the top make money and other market makers made money on the spread or the volume created by the activity.  The stock may or may not go up to the daily high once the stomping is over. If it does, that is a bullish signal


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