I’ve been preaching Wall Road manipulation for years. And Wall Road took manipulation to a very new stage in 2022, accumulating shares of panicked retail merchants after the distribution interval from January by Might 2022 ended. Positive, we had two extra value lows – one the very subsequent month in June 2022 after which once more in October 2022, however the traits of a backside and accumulation had already begun:

The buildup/distribution line (AD line) was only one secondary indication of the manipulation that passed off in 2022. We noticed the AD line drop all through the primary few months of 2022 and method year-to-date lows in Might, however from that second on, there was intraday shopping for that urged the large Wall Road corporations had been gladly shopping for shares from those that believed this was the beginning of a secular, or long-term, bear market. Regardless of the still-downward slope of inventory costs into 12 months finish and the beginning of 2023, the AD line has been sloping greater.

Manipulation At Its 2022 Core

I tracked the intraday value motion for the SPY, QQQ, and several other ETFs and particular person shares. There may be not a single doubt in my thoughts that Wall Road used the entire negativity that THEY CREATED to profit them as they had been in a position to exit the market on the 2021 excessive and soar again in at a lot decrease costs all through 2022. Now we’re seeing this manipulation come to its conclusion with the large run up in inventory market costs in 2023.

Let me break down for you the value motion within the QQQ in three distinct phases in 2022 and early 2023. The three durations are as follows:

1. January 3, 2022-Might 20, 2022
2. Might 23, 2022-October 13, 2022
3. October 13, 2022-February 10, 2023

Inside every of those durations, I am going to present you the way the QQQ traded at:

1. The opening hole (panic response to information)
2. From 9:30am to 11:00am ET (novice hour)
3. From 11:00am to 4:00pm ET (skilled time)

Part 1: 2022 Distribution

This is the breakdown of how the QQQ traded throughout that January third by Might twentieth interval all through the day:

• QQQ began interval at 400.41
• Opening gaps (internet): -29.68
• 9:30 to 11:00am ET (novice hour): -68.01
• 11:00am to 4:00pm ET (skilled time): -14.59
• QQQ ends interval at 288.13

There was promoting throughout each timeframe because the distribution and cyclical bear market was fairly evident.

Part 2: Then Comes The Market Disguise

This is the breakdown of how the QQQ traded throughout the Might twenty third by October thirteenth interval all through the day:

• QQQ began interval at 288.13
• Opening gaps (internet): -52.39
• 9:30 to 11:00am ET (novice hour): -10.54
• 11:00am to 4:00pm ET (skilled time): +37.46
• QQQ ends interval at 262.66

Okay, that is the place the charts do not inform us every part taking place beneath the floor. The QQQ fell one other 25+ factors throughout this era, however try the ultimate FIVE hours of the buying and selling day. It netted a GAIN of 37.46 all through this era. This end-of-day power is what strengthens the AD line that I confirmed earlier. Wall Road corporations had been steadily BUYING and ACCUMULATING, whereas costs continued to say no. I am certain they’d wish to thank everybody personally for his or her beneficiant reward of their shares. It is Wall Road’s very personal model of “Go Fund Me”.

Part 3: It is Hammer Time!

The underside is in, of us. October 2022 grew to become the Seventh October to put declare to a bear market backside within the final 14 bear markets – stretching again to 1950 on the S&P 500. Anybody assume that is odd? There have been 14 bear markets prior to now 73 years and half of them have led to October. Aren’t there 12 calendar months? But one has accounted for half the bear market bottoms? What a coinkydink!

Okay, so now let’s try how the QQQ has traded for the reason that October thirteenth low shut:

• QQQ began interval at 262.66
• Opening gaps (internet): +1.81
• 9:30 to 11:00am ET (novice hour): +1.16
• 11:00am to 4:00pm ET (skilled time): +34.07
• QQQ ends interval at 299.70

Wait a second! The place did all these morning gaps go? And the morning promoting – what occurred to that? Wall Road corporations had already stuffed their stockings for the vacations. No extra manipulation required. Now we’ll all watch because the information improves all through 2023. The Federal Reserve has already began it. They’ve introduced we’re in a interval of disinflation now.

“Yeah Tom, however what concerning the deep recession forward?”

LOL. Did you see the roles report final week? Unemployment is at a report low! Jim Cramer, a former Goldman Sachs youngster himself, now says the Fed can obtain a gentle touchdown. In one other six months, all of the dangerous information and retreating inventory costs will likely be in our rear view mirror. And Wall Road corporations will likely be fats and completely satisfied.

This text is why EarningsBeats.com was fashioned. To analysis, analyze, and inform of all of the Wall Road deception. Sure, technical evaluation and analyzing value motion is extraordinarily necessary, however it’s solely part of the battle. Uncovering the “legalized thievery”, as I wish to name it, and educating these learn how to counter it, is a BIG a part of profitable buying and selling. I spend numerous hours doing this analysis for the advantage of our members. I issued warnings to our members and StockCharts group at massive on the market high. I additionally mentioned that being in money or brief in June 2022 carried manner an excessive amount of danger, so I referred to as a backside there. I imagine it was the correct name and all of it stemmed from this Wall Road deception. There’s a TON of cash at stake in our monetary markets. Ask your self a query. Do you imagine that the big Wall Road corporations have our greatest pursuits in thoughts?

Quick-Time period Manipulation Runs Rampant Too

We have been providing our EarningsBeats.com members a glance into month-to-month choices expiration for the reason that day I returned to EarningsBeats in 2019. Market makers have massive inventories of name and put choices as month-to-month choices expire (third Friday of each month). The premiums they have to pay out are fairly substantial. However this premium solely turns into an issue at that third Friday shut (which is that this Friday, February seventeenth). Do you assume market makers “may” attempt to direct costs in a sure route if it means they might save BILLIONS of {dollars}? In spite of everything, they commit their huge capital within the monetary markets every single day.

I am 100% satisfied that market makers direct costs greater or decrease heading into choices expiration Friday to economize. Take into account how the S&P 500 has traded throughout varied durations of the calendar month since 1950:

• Twenty sixth-Sixth: +21.05%
• Seventh-Tenth: -4.11%
• Eleventh-18th: +12.37%
• Nineteenth-Twenty fifth: -7.62%

From my training CPA days and the audits that I managed, I do know that many firms have 401(ok) retirement plans. Most firms ship their workers’ contributions to sponsors (Vanguard, Constancy, and so forth) across the 1st and sixteenth of calendar months. Some firms will ship different days, however the largest inflows will usually happen across the 1st and sixteenth. Wall Road corporations know this cash is coming in. So, once more, right here comes the “legalized thievery”. Frontrunning is an unlawful type of shopping for simply forward of retail cash. However when Wall Road corporations purchase inventory forward of inflows, is not that primarily the identical factor? That is why the above annualized returns are robust from the Twenty sixth to the Sixth and from the Eleventh to the 18th. Wall Road corporations purchase forward of inflows, driving costs greater. After which comes the cash from people and pensions, driving costs greater. Traditionally, the Seventh to the Tenth represents a profit-taking interval. I imagine the Nineteenth to Twenty fifth is a mix of revenue taking AND value manipulation because of choices expiring. Month-to-month choices expiration can solely happen from the fifteenth of a calendar month by the twenty first. The third Friday of the month should happen on a type of 7 calendar days. The earliest the third Friday will be is the fifteenth of the month and the newest is the twenty first of the month. There are the reason why we might see options-related promoting into the week after Friday choices expiration, however I will not get into that right here.

It is also very attention-grabbing that the worst-performing consecutive calendar days on the S&P 500 are the Nineteenth and twentieth. Usually, the inventory market rises into the center a part of the calendar month, leading to an imbalance of in-the-money calls vs. in-the-money places. That helps to clarify why we see weak point from the Nineteenth to the Twenty fifth. It is one other instance of market makers operating a “Go Fund Me” marketing campaign. Unsuspecting retail merchants pay the value, sadly.

We make sure that our EarningsBeats.com members are at the very least conscious of shares that might be topic to short-term market maker manipulation because of choices expiring. I imagine we’ve got directional clues short-term that may considerably enhance our buying and selling success and efficiency. Starting this weekend, we’ve got launched a particularly inexpensive “Max Ache” service designed to offer our members clues about value route this week. I hope you reap the benefits of it.

Joyful buying and selling!

Tom