
STREET SHENANIGANS


"A penny less paid [to Wall Street] is 
a penny earned."
					-- T.K. Lin

It is taboo to talk about what goes on behind the 
scenes on Wall Street and that's why you don't hear 
about it.  However, we believe the public deserve to 
know at least a little.  What we reveal here is just 
the tip of the iceberg, sufficient to pique your 
interest so that you will no longer be the innocent 
and naive investor/trader.  It is not our intention 
to provide you an education on Wall Street chicanery, 
as time and space do not permit this.  However, any 
motivated investor/trader will embark on the 
rewarding path of discovery once shown a glimpse of 
the machinations of Wall Street, and that's what we 
intend to do here -- show you a glimpse.  We'll even 
give you some examples of profitable applications.  
But the rest is up to you.  You can go as far as you 
want to as there is no limit to your discoveries and 
financial rewards.  If you enjoy detective work and 
making money along the way; you may yet find your 
calling.

First, be assured that it is extremely easy to 
manipulate the stock market, and there are many ways 
to do it.  And because it is so extremely profitable 
and easy to do, it is done every day. For example, an 
influential Wall Street firm may "downgrade" a stock 
to flush out the sellers just before covering their 
short position in the firm's own trading account.  Or 
the firm may "upgrade" its recommendation on a stock 
after covering short and going long.  Such sure 
sources of "fast cash" routinely enable many Wall 
Streeters to rake in multi-millions in annual 
personal income.  Not a bad living at all when one 
can leisurely pick up in a month what most hard-
working American families cannot hope to accumulate 
in a life time.  And it doesn't take brains or 
special ability, much less hard work or scruples.  

As always, Wall Street's game plan is much more 
effective and the profits much larger if it is 
carried out in a coordinated way, as it usually is.  
You, John Q Public, however, would not be the 
perpetrator, but the keen observer.  Your goal is to 
try to ride on the coattails of these financial 
Goliaths to your own financial independence while 
avoiding being financially trampled like the rest of 
the public.  Don't ever expect to be invited to Wall 
Street's feast.  You simply go incognito and 
uninvited.  Be content with inconspicuously nibbling 
away at the crumbs near the edge of their table.  
Stay invisible and make no noises, or you'll be 
bounced out from the Street party in a flash.  With 
the right attitude, you'll be able to consistently 
squirrel away from Wall Street what is rightfully 
your due.

To profit from such Street shenanigans, you do need 
to do some home work in order to buy (or cover) near 
price bottoms and sell (or short) near price tops.  
Most of the time, all it requires is daily analysis 
with MarketMaster(tm)(our price forecasting software), 
close observation, and patience.  Let's first discuss 
the issue of when to buy. Ideally, you want a stock 
that has declined sharply and that has been touted by 
Wall Street (even as they unload it) on its way down.  
After it has dropped very substantially a red flag is 
flashed if this downtrodden stock is somehow suddenly 
and belatedly "downgraded" by Wall Street at what is 
already rock-bottom prices.  The public's emotion at 
this point, having faithfully held on to the stock 
and ridden with the losses all the way down, is one 
of despair and fear, and their inclination is to 
either sell long (throw in the towel) or go short (in 
a vain hope to recoup) the stock when the media is 
full of planted "reasons" for why it must be sold "at 
once".  To succeed in this business, you need to keep 
any "herd instinct" in check and control your natural 
and emotional reaction to news plants and 
disinformation, and be ready to go against the crowd.  
Follow MarketMaster(tm) (our price forecasting 
software) particularly closely, as almost invariably 
it will soon point to unusual bullishness and prevent 
you from becoming a perfect contrary indicator.

In fact, while the crowd is selling long and selling 
short at rock bottom prices thanks to Wall Street's 
"advice", it is early warning to you that it is time 
to get ready, at least psychologically, to cover 
short and, somewhat later, go long.  However, to 
determine if the nearby important price support level 
for this downtrodden stock will hold or if record 
lows will be made, you must analyze it closely with 
MarketMaster.  Typically, when Wall Street vigorously 
"downgrade" a stock, it may be days to several weeks 
before all the public's long positions are flushed 
out.  This is particularly true if such "downgrading" 
is coordinated and sustained.  One firm's 
"downgrading" may be followed by another firm's 
"downgrading".  The key here is to closely monitor 
the pronouncements of major investment firms on the 
subject stock by listening to their "news" 
dissemination while double-checking with 
MarketMaster.  Be aware that such sustained 
"downgrading" may lead to prolonged price depression 
in the subject stock.  Both the public and the 
institutional investors need time to digest and 
obligingly carry out the sell "recommendations" of 
Wall Street.  Obligingly, Wall Street is surprisingly 
"patient" and "understanding" at this critical 
juncture with their repeat "warnings" so that the 
public may at last sell or go short at price bottoms 
with utmost confidence and courage.  

While this can be fascinating as you look ahead to 
the bullish opportunity that is unfolding, be sure to 
use the confirming indicator of MarketMaster to help 
keep you from buying too soon.  Remember, "a penny 
less paid is a penny earned", and a lot of times you 
are making money simply because the stock you'll 
ultimately purchase is getting cheaper each day.  
Your goal is to pick up the depressed shares from the 
"clients" of Wall Street firms at the lowest possible 
price above $0.  Your reward/risk ratio is much 
improved as the stock sinks to important price 
support levels, or even new lows. Our description 
here is necessarily limiting in that the whole 
process is a bit like bicycle riding.  You learn and 
profit most by actively participating, experiencing 
and doing, initially with paper trades if necessary, 
but ultimately with real cash.  When you finally 
place your order to buy, do it in steps and ease 
yourself in with multiple trades over multiple days.  

In general, the more belated, severe and sustained 
the "downgrading" of a stock by Wall Street, the 
greater the need for patience and the greater the 
percentage of subsequent price recovery from price 
bottoms.  After getting in at price bottoms, follow 
the stock closely with MarketMaster and be prepared 
to take some quick and early profits.  Just remember 
that while you were nibbling to build your very 
modest long position, Wall Street was hauling in 
public shares by the truckloads to "maintain an 
orderly market".   Used to "fast cash" and instant 
gratification, Wall Street will always lighten up a 
bit on its massive inventory as the prices rise from 
their rock bottoms.  Likewise, you should reward 
yourself with some profit.  As often happens, Wall 
Street Goliaths loathe successful bottom fishers who 
cling to their coattails and will engineer a "retest 
of the low" to shake you out.  Having taken some 
profits, you now have extra profits and cash and 
therefore stand ready to replenish at the artificial 
price dip for another fast and profitable trade.  To 
gain insight into Wall Street's game plan, pay 
particularly close attention to what MarketMaster has 
to say.

Conversely, when a stock is "upgraded", there is 
often a waiting period during which buyers are 
exhausted of their cash by Wall Street's short sales 
before the stock price will decline.  The more firms 
there are "upgrading" a stock at price highs, the 
more sustained will be public buying and the more 
patience is called for before going short.  Ideally, 
you want a situation where a stock had a meteoric 
rise to a lofty peak as a result of heavy "upgrading" 
by Wall Street, then declined, and now once again 
being pumped up by Wall Street hype to re-approach 
its earlier lofty perch.   Ideally, you want the 
maximum number of investment firms touting the stock 
in this second wave of induced public buying prior to 
establishing your short position.  This ensures that 
all potential buyers will have been hyped out of 
their reluctance and ignorance into buying.  Once 
this heavy public buying is exhausted by Wall 
Street's corresponding heavy short sale, a decline is 
inevitable, with a severity proportional to the 
earlier-manufactured public euphoria (or compulsion).  
As stated earlier, gradually build up your short 
position and protect all short positions with calls, 
straddles, warrants and like instruments as you open 
them.  Again, be prepared to take some profits after 
a significant decline has occurred.  Follow the 
situation closely with MarketMaster.

There are times when a stock is at or near its highs, 
and suddenly, it drops as a result of "downgrading" 
by some Wall Street firms.  This is an indication 
that the firms are net short the stock.  Of course, 
if you are not yet short the stock, it may mean that 
you missed the top.  Nonetheless, Wall Street firms 
are extremely trading-oriented, because that's the 
way to optimize rate of return, and their transaction 
costs are virtually zero.  Therefore, there is some 
chance that upon short-covering, the stock price may 
rebound (although usually not to the level of the 
recent top).  At this rebound, you may want to set up 
your bearish position(s).  Again, it is important to 
ease yourself into the position(s) in steps rather 
than in one single trade.  Again, always protect your 
short position(s) with calls, LEAPS, warrants, 
convertibles and other appropriate strategies.

MORE STREET SHENANIGANS
There are certain times during the day when one may 
gain a glimpse of the intentions and agendas of Wall 
Street.  Lunch hour is a good time for the Street to 
try to make prices "look good" or "look bad".  The 
only disadvantage to the Street is that such 
cosmetics may not last if the "bait" is not taken, 
since there are two to three hours to go before the 
market closes.  Therefore, the last half hour of the 
trading day can be important.  It is much easier to 
drive up or down prices during the last half-hour or 
so to create the required cosmetic "look" during 
prime time news.  

To drive prices up and to help generate public 
bullishness, Wall Street will tend to concentrate its 
buying in the last half hour of trading, particularly 
if earlier lunch-hour makeup did not quite do the 
job.  Likewise, to generate public bearishness, Wall 
Street may concentrate selling during the last half 
hour of the trading day.  Such "bullishness" or 
"bearishness" tend to carry over to the next day's 
opening.  If you are a keen observer, you'll usually 
figure out what Wall Street's short-term agenda is 
likely to be and profit from this insight.  Of 
course, you will gain further insight by checking 
your assessments against the forecasts provided by 
ProfitMaster(tm) (our telephone forecasting service) or 
MarketMaster.  For analysis of very short-term 
activity, you will need the magnifying power of the 
intra-day version of MarketMaster, which will permit 
hourly or half-hourly studies, in addition to end-of-
day analyses.

Other than IPOs, there are times when Wall Street 
firms will offer to sell you stock without 
commission.  Beware.  There is no free lunch on Wall 
Street.  Check with ProfitMaster or MarketMaster and 
you'll often find that the stock is ripe for short 
sale.  Years ago, before the existence of 
ProfitMaster or MarketMaster, we were able to compile 
very profitable short-sale lists from the stocks 
regularly offered "net" (i.e. without commission 
charges) to the public by a leading brokerage firm.  
The firm routinely used this method to unload its 
"slow-moving" inventory to the public, who typically 
keep the stock (i.e. remove from circulation) after 
purchase rather than trade them (i.e. return to 
circulation).  

Were the leading brokerage firm to dump its stale 
inventory on the floor of the exchange, it would have 
lead to sharp price breaks and cost many times the 
waived commission charges.  Typically, the account 
executive who sells the stock will be given extra 
commission and/or payout by the brokerage firm 
directly but the public buyer is not supposed to know 
this.  There are times when the stock is so bearish 
that the account executive is offered double 
commission by the brokerage firm while the public is 
charged none.  This is a potent indication that the 
stock is extraordinarily bearish.  In all cases that 
we studied, the stocks involved tumbled badly within 
a few weeks, resulting in severe losses to the unwary 
and trusting public customers of the firm.





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Copyright a 1994 by R.M.C.                      Ver.1.01                           All rights reserved worldwide.


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