mnandii wrote:mnandii wrote:@slick, no one has the capacity to manipulate any liquid market in the world. NO ONE (not even the Central Bank!).
Guys, it is important to note that before I started learning Elliott, I was like many other speculators. I wandered between technical analysis (other than Elliott) and fundamental analysis. And yes, there was a time I believed this useless myth that there are people who manipulate the markets - that there is smart money! Nothing is further from the truth. If a market is manipulated then it isn't liquid. Mass psychology determines the direction that markets go, not some super resourced people who take advantage of the less endowed.
And if markets are indeed manipulated then there wouldn't be any need to try to forecast them, would there?! Indeed why would anyone even invest in such a market if you are not among or know the strategies of smart money managers.
The earlier one comes to agreement with the fact that no one manipulates markets the better their view of the markets become.
There is more flesh to what I have stated above and I would advice people who are interested in facts to get the book Prechter's Perspective and also check 'Market Myths' from
www.elliottwave.com Developed world central banks manipulate liquid markets all the time.Yes its harder to manipulate a liquid market than an illiquid one but central banks have the firepower to push markets in the direction they desire since they can print fiat currency almost to infinity to pump up markets.Even the well respected Forbes magazine image below agrees with me
The US government bond market is the most liquid asset market in the world and the Fed massively manipulates this market and has been doing so especially after the 2008 GFC by buying several trillions of treasuries to keep yields suppressed below 1% currently for most bonds to lower borrowing costs thus enabling every Tom,Janet,Tesla,General Electric,US shale oil producer borrow at utlra low costs and build bubbles that have recently come under stress.Its gets worse in the Eurozone where the European Central Bank (ECB)-ECB owns over 1/3 of Eurozone bonds and Bank of Japan (BOJ) owns over 1/2 of Japanese bonds.The BOJ and ECB owns so many bonds that many bond yields flipped into negative territory.The BOJ has taken this a step further through measures like yield curve control ie e.g the BOJ has pegged the 10 year bond to 0% such that if the bond sells off and yields rise above 0% the BOJ will buy back as many bonds as possible to return yields back to 0%.A blatant manipulation by all accounts.The BOJ also buys stocks and is the biggest single player in the Nikkei
The April rally in the US stock market after the March crash is purely attributed to Fed money printing.There are no fundamentals backing that bear market rally other than Fed unleashing trillions of fiat currency to buy all asset markets and prevent a complete collapse.How can US stocks possibly been rising in the last few weeks yet the US has the highest Covid-19 infection and death rates,non essential businesses are under lockdown and over 30 million jobs have been lost so far?Its all about the Fed thus the US central bank is manipulating all asset markets buy buying government and corporate bonds,commercial paper,bailing out money market and hedge funds and indirectly buying stocks.Thats obvious central bank manipulation.
As I said,central banks dont have 100% control of markets but are by far the largest factor contributing to market moves.Technical (TA) and Fundamental (FA) Analysis isnt totally obsolete but central bank action reduces its efficacy.TA and FA are far more prominent in free markets.I have to admit that the Kenyan bourse is far more free market than Western markets because Opus Dei doesnt pull the shenanigans of mass money printing like first world central banks to prop up markets.Inevitably free market forces will reassert themselves in advanced nations and the current deflation is a free market natural mechanism to purge malinvestments and asset/debt bubbles but central banks are fighting the deflation by trillions of new fiat currency creation.Its this titanic struggle between the natural deflationary corrective mechanism vs central bank money printing inflationary response thats creating these volatile swings in markets
Contrarian Investor and Trader.Advocate of free markets,limited government interference in the economy and sound money