Todays RegSHO short sale metrics are quite a laugh, did anyone notice?
20120723|RFMK|1550000|0|2041100|O
Less than a half million shares were actually traded today if you net-out the short sales with the rest of the volume. Remember, the market participants and MMs can find shares to borrow and short them and then dump them on the bids of colluding MMs to manipulate the price down then wait for any RFMK longs to capitulate from the pain and snap up their shares to cover, at the lower price, thereby making their lunch money for the day. Rinse/repeat. Often the MMs work together in just shuffling shares around intraday to paint whatever volume and price points they want, effectively drawing whatever chart they wish so the trading tape is suspect. Less than 25% of the trading volume today was just simply shares getting bought and sold normally, all the rest were short sales and then covered later intraday. Many on "other" boards will tell you that these numbers mean nothing and show nothing other than the MM activity, as in legged-trades, however this is false. These are netted daily aggregate figures of short sales versus total volume. The affect in the numbers of the legged trades by MMs are already netted out and dealt with by the time these figures are reported daily by FINRA. They will further lead others astray by claiming that the T+3 settlement window is what distorts these numbers, but again, that is false. The T+3 settlement window has nothing to do with the ratio of the total short sale transactions versus the total volume, especially when dealing with so few shares traded intraday. We all know already that the bi-weekly short interest numbers show that there are no large short positions in the stock, therefore the only way to interpret the daily numbers from FINRA is to assume that the MMs are shorting and then covering intraday in order to game others (retail) trading in and out or accumulating or selling so they can make their daily lunch money. It is that simple. They often claim that the only way to interpret the action is to assume that there is more dilution going on and the MMs are shorting into the dumpage but this false claim like most does not make any sense, because MMs typically short bids that come in to buy the stock when the MM does not necessarily yet have any shares on hand. With dilution, one of the MMs already has a bunch of the clients shares (many times from the companys account) and wishes to dump them on buyers in the market so they would not go short until bids come in to purchase these shares. It does not mean they would not try to game this situation so that they are shorting every bid that comes in all the while knowing they have tons of shares they can set low on the ASK immediately after they rip through all the existing bids in order to push the pps as low as possible. In either case, there is no one to one correlation to dilution and how much shorting the MMs are doing based on the bid volume. There always has to be a buyer for unique shares to sell and if they short borrowed shares they then need to turn around and buy to cover real unique shares, very simple. The factor that is limitless is their ability to borrow and short X number of shares all the while knowing that there is a seller of X number of shares (or thereabouts) that could allow them to cover. Basically they have a free hand to short as much as they want at anytime as long as they can properly locate those borrowed shares to short. Even if there are no sellers to allow them to cover afterwards, the only limit for them is the number of properly borrowed shares their own risk assessment will grant them to short.
Based on my experience, once the short sale volume to total volume (intraday) moves higher than 75%, it is rather obvious and clear to anyone that the MMs are simply throwing the stock around like a rag doll and the price and volume movements mean absolutely nothing on a longer term scale because no one knows what is the future number of buyers and how many shares they could want. At anytime on big news, RFMK could become a household name because of all the amazing work Cheryl Shuman has done and very quickly there could be 10 large firms who wish to each own 10% of the O/S, that is only 100M shares each (large firms could easily wish to own $100k worth of stock) and there you go, just in that scenario is 100% demand for all the shares that exist which would sky rocket the price rather quickly and sharply. Obviously this is an extreme example, but many use a day to day perspective of sentiment and the daily price and puny volume movements as factors to guage the status of the company, which once one understands the MMs are playing with the stock like its a rag doll toy understand that such assumptions based on the meaningless daily action are completely and entirely faulty.
GLTA!
$RFMK!
