Possible??
Marcus, a data analyst from Yahoo finance board breaks it down to a science. If you ever wonder why the SP is not responding to multiple excellent news, here's your answer:
Sometimes when institutional shorts know that they will have a restriction the next day, they will buy up thousands of shares during the red day and then flood sell orders almost at market at the beginning of the next morning to wipe out the bids to a low SP. They then set up a large short order on the ask just to hold the price there momentarily. They hope that the 2 day drastic drop will frustrate longs into selling it down further (trigger any remaining stop losses) and that they could draw some momentum shorts into continuing the selling pressure at the lower prices. If that happens, they pull their short order and try to cover their previous short positions. Remember, institutional shorts coordinated a short attack when the SP was at $10 and they don't want short at these low prices because their isn't much upside left. Shorting is all about timing and they shorted when it was $10-$6..$5. They will only short now at these lower prices strategically to stop a rally or "produce" other sellers to keep the price low so they can exit. This short position for an institutional short is just tying up capital and an analyst's time. The pending FDA and EAU and uplist also creates tremendous risk for them. They can't short or close on the bid today because of the SSR rules and so they needed to bring it down to buy shares cheap or its a wasted day and they would lose ground of the share price. Covering on the ask because of the uptick rule can create a short squeeze so this strategy was necessary. It doesn't always work especially if there is a high percentage of institutional investors because mutual funds will buy on support but for a small OTC company, it was more than worth the gamble. Heavy retail buying or retail shorts not coming to help with selling pressure is the downside financial risk to the model. However, I used to produce data that could show the probability if the attack would be successful (it based on trending volume, institutional investors percentage etc). It appears that the dumb retail shorts did come today let them out after it hit 3.65 and drove the price lower. It looks like there was some long selling too but you can't get the data until the market closes. I don't even have 20 percent of the software i used to use but I can still sniff the patterns. Those shorts that came in are now holding the bag. If the volume was high and the price rides up, it could trigger a mini short squeeze on these new retail shorts.
Marcus, a data analyst from Yahoo finance board breaks it down to a science. If you ever wonder why the SP is not responding to multiple excellent news, here's your answer:
Sometimes when institutional shorts know that they will have a restriction the next day, they will buy up thousands of shares during the red day and then flood sell orders almost at market at the beginning of the next morning to wipe out the bids to a low SP. They then set up a large short order on the ask just to hold the price there momentarily. They hope that the 2 day drastic drop will frustrate longs into selling it down further (trigger any remaining stop losses) and that they could draw some momentum shorts into continuing the selling pressure at the lower prices. If that happens, they pull their short order and try to cover their previous short positions. Remember, institutional shorts coordinated a short attack when the SP was at $10 and they don't want short at these low prices because their isn't much upside left. Shorting is all about timing and they shorted when it was $10-$6..$5. They will only short now at these lower prices strategically to stop a rally or "produce" other sellers to keep the price low so they can exit. This short position for an institutional short is just tying up capital and an analyst's time. The pending FDA and EAU and uplist also creates tremendous risk for them. They can't short or close on the bid today because of the SSR rules and so they needed to bring it down to buy shares cheap or its a wasted day and they would lose ground of the share price. Covering on the ask because of the uptick rule can create a short squeeze so this strategy was necessary. It doesn't always work especially if there is a high percentage of institutional investors because mutual funds will buy on support but for a small OTC company, it was more than worth the gamble. Heavy retail buying or retail shorts not coming to help with selling pressure is the downside financial risk to the model. However, I used to produce data that could show the probability if the attack would be successful (it based on trending volume, institutional investors percentage etc). It appears that the dumb retail shorts did come today let them out after it hit 3.65 and drove the price lower. It looks like there was some long selling too but you can't get the data until the market closes. I don't even have 20 percent of the software i used to use but I can still sniff the patterns. Those shorts that came in are now holding the bag. If the volume was high and the price rides up, it could trigger a mini short squeeze on these new retail shorts.
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