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The EconomicJoker
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I'm an IT guy who reads quite a bit on the economy. And I'm just a man. I like to complain and I can't stand stupidity. Most people call me negative but I like to think that there is a simple efficient way of doing things, with courtesy to your fellow man, but most people don't buy this. I can... More
  • Big Brother is really a Big Buyer? 0 comments
    Feb 7, 2010 9:03 AM

    Ever wonder what is making the market move so much in the last hour of every day? Ever wonder how a market can start down almost 200 and then recover to finish around even? Do THAT many people change their minds at lunch time? How that hooha can a market keep rising on no volume?

    We're all asking the same questions. This market is screwy and this guy certainly makes sense.  Well Charles Biderman thinks he knows the answer, but he just can't prove it. As far as I can google him, he's the CEO of TrimTabs, a respectible firm that tracks equity market liquidity. Buying and selling from what I gather. The crazy thing is that his company, which has all the data it needs to determine who is buying and selling, can't do that.

    I found this video on the net and I can't seem to be able to embed the video (help SA?) so here's the link.

    I then dug some more on this video and found it written about in a Stansberry report which I have quoted here:

    For all his experience and the data he's got at his fingertips, Biderman can't figure out who pushed stocks up from the panic lows of last March to the rarified heights of today. Biderman said on CNBC, "Somebody's buying, taking [stock] prices up... we just don't know who."

    Biderman's decades of experience tells him that, over the past nine months or so, things haven't happened in the stock market the way they usually do. Historically, after the market has fallen, the first buyers to return in force are public companies themselves. They see their own stock selling cheap and step up the share repurchases. Perhaps some other corporate buyers come in, like insurance companies.

    At some point, that volume pushes stock prices up a little, and retail investors come back in. But Biderman says he's never seen a market like this one, where it just kept rising and rising on falling volume. He says the corporate buyers never came back. The retail investors – individuals like you and me – never came back.

    But Biderman has an idea. He says, "There's only one buyer who's been buying all along... the government." Biderman admits he has no evidence for this. He just can't figure out who else it could be. He isn't the first person to notice "There's been a buyer comes in late in the day, just about all the time, for the last nine months."

    As the song says, "Things that make you go hmmm."

    Disclosure: None
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