"In the short run the stock market is a voting machine, but in the long run it is a weighing machine." Is this a line the computer trading industry uses?
In the short run, without buyers the bots/computer traders can and do manipulate the price by high speed trades of small volumes and the ability to both buy and sell into the market incessantly. This is greatly supported by their nearness to the ASX computers, where they can take late advantage of incoming trades and act in advance of them!
At the same time they can rapidly adjust their positioning in the stacks - although my estimate is that about 40% of trades are never in the stack and come straight in for the transaction!
My observation tells me that when activity is low, they can easily keep the price where they want, whilst frightening traders and retail investors to relinquish shares for the "bots" to slowly acquire.
The simple fact that they pay for their closeness to the ASX computers says it all. This is most certainly not to just give them a level playing field - as I think you once suggested!
Their only risk is that they can't contain the price once it runs - but by then, they should have acquired quite a few at arguably below "market" price.
The rest of the world is waking up - but as usual, Australia - represented by the incompetent ASIC will take years before it stops this computer traded nonsense!
Lets put a fee on each trade and see what happens!
BLT Price at posting:
$1.20 Sentiment: Hold Disclosure: Held
