How Low Will it Go?, page-5

That way of thinking - maybe they know something we don't - just delivers $$$ to the shorts. And they know that that way of thinking is widespread, and they are more than happy to take advantage of it.

It goes like this : shorts hit a stock hard. Just their selling drops the share price, but because they have now flooded the market with extra shares many pre-existing buyers have been taken out of the market but the pre-existing sellers are still in the market and that drops the share price further. All the price falls potentially trigger stop-loss selling, which of course drops the price further in a vicious cycle. Then when weak-kneed people think "maybe they know something we don't" and stay out of the market (or finally crack and sell if they were long), the price is weakened again. So the shorts just sit back for a while, before quietly and easily covering. Barring unexpected major positive news, shorting for the big guys is just a way of printing money. If they are satisfied, for example, that the ASIC report won't be out till next week, then they can squeeze a few more dollars out of the market this week - and maybe that is what is happening today.

If there is something they know that we don't, it could be as simple as the date ASIC will report on [I'm now in conspiracy territory so ignore this bit!], meaning that they know they can safely keep shorting and driving the price down, provided they cover before the ASIC date.