I would appreciate your understanding regarding my lack of English proficiency as an Asian. (The following content was translated with the help of Google Translate.)
This is strictly an assumption.
There is no objective evidence. Please take this simply as an opinion.
Furthermore, I lack experience with the U.S. stock market.
It is also highly likely that all of the situations below are due to my lack of knowledge and experience.
I hope that I am wrong.
* I have been holding put options on Asian stock markets for one month.
Overview
Trump’s tweets lack credibility.
So why does the market rise every time he tweets?
The reason is that the market has always risen whenever he tweets.
The Trump Trading Team (TTT) demonstrates to the market that Trump’s tweets are credible and have strong influence by placing massive futures buy orders whenever a tweet occurs.
And their orders draw strong turnaround candles. This strategy continues to be successful.
It seems nearly impossible to beat them with the market’s scattered energy.
Their goal is not insider trading. It is to drive the market upward. That is a much greater gain for them. Furthermore, the market must not fall right now.
Even if TTT’s position is at a loss, if Trump is in power, that loss could be easily recovered. Trump will certainly do so.
TTT orders are even more powerful because their purpose is not profit taking.
They always place orders at the market price and are willing to accept the cost of the bid-ask spread.
In fact, they prefer to accept large spreads. This is because creating a large price gap can trigger HFT market-making orders, thereby inducing spot buying.
Take a look at the index futures and oil futures prices from March to April. We can easily see when they appeared at critical moments. Of course, they continue to work even when they are out of sight.
I am observing these phenomena in Asia. I trusted in the U.S. stock market’s self-correcting mechanism, but unfortunately, it appears the market is not strong enough to fend off market manipulation by powerful authorities.
This is not simply a matter of manipulated market prices. Now, TTT’s position could, when they need it in the future, smash the market like pressing the nuclear launch button.
Reasons why TTT is thought to exist.
1. Concentration and repeatability of order patterns that are difficult to occur in natural conditions.
Even when an event occurs with everyone prepared (assuming the schedule is predictable), there is always a time lag in the market where diverse opinions clash and generate large trading volumes.
It is nearly impossible for everyone to think in only one direction and execute simultaneously.
If this phenomenon occurs repeatedly, the cause is likely not transactions involving multiple people.
Large order volumes occur simultaneously, as if everyone shares a single intention (within seconds). What is even more peculiar is that these orders always include the entire bid-ask spread.
It appears as though the objective is not profit, but rather to manipulate market prices.
A sudden rise in futures prices triggers HTF’s market-making orders to sell futures and buy spot stocks. As a result, the stock price follows a significant portion (30–70%) of the futures rise, and if this method is executed 3 to 4 times consecutively within one minute, the market rises sharply, and followers enter the market.
2. After-hours trading intended to efficiently induce a “wag the dog” effect.
There are two advantages to after-hours trading for market manipulation.
- Thin Trading Volume: Manipulation teams can manipulate U.S. index futures, the standard indicator of global stock markets, with a small amount of money. You might be a little surprised to realize that the amount required for this is smaller than you might think.
- Unprepared Market Condition: Because the market is caught off guard, it becomes defenseless against TTT attacks.
Traders lacking confidence change direction in an instant.
The reason this is possible
1)Massive but dispersed ‘energy‘ VS. small but concentrated ‘power‘
Even if 10,000 are scattered over 6 hours and 30 minutes, they can be defeated by the 10 that exists in a matter of seconds.
That 10 changes the thoughts of the remaining 10,000. The 10,000 play it safe, but this is especially true if the 10 can sacrifice itself.
2) Actually, Trump’s tweets have no power, but…
The powerful buy orders generated whenever a tweet is posted brainwash the market into believing that Trump’s tweets are credible and powerful.
The more Trump tweets, the more followers flock to him, and his tweets gain increasingly greater influence.
Other investors did nothing.
But the market rose.
Purpose of TTT
They are not trying to gain unfair profits through insider trading.
The fact that the market did not collapse is a powerful justification that can legitimize Trump’s actions.
He is willing to do anything to maintain his power. If the market collapses, Trump will collapse too.
Trump must prevent a market collapse and an explosion in oil prices.
Even if he suffers losses from the market manipulation funds, he will believe that if he can maintain his power, he can recover ten times the amount of the loss.
This money is not important to him.
Furthermore, if everything goes his way, this manipulation fund also generates profit.
More Important Risks
The manipulated funds already contain significant long positions.
It will result in one of two outcomes.
When the market eventually beats TTT and falls, a massive crash will explode due to the liquidation of huge positions.
And it will hit the bottom of the market collapse.
Now, the market will start to recover.
However, if TTT beats the market and everything goes according to Trump’s will,
it means that Trump could collapse the market with a single click of a button whenever he wants.
In that case, when will he press this button?
He will probably press the button to his advantage rather than to adjust it to mitigate the market shock.
Other possibilities
If Trump is driven into a final corner, this sell-off could occur.
This has two effects:
- It simply causes the market to crash. Manipulated funds are ultimately short-term capital.
- It emits a signal that brainwashes the market into believing that Trump’s personal issues are negative news.
April 2nd
April 2nd was the day TTT suffered its first defeat outside of regular trading hours.
This was possible because Trump’s speech time was scheduled.
The market orders were not dispersed but concentrated, and crushed TTT.
However, once the stock market opened, TTT attacked the market with all its might, and as time went on, the market could not maintain its focus.
In the end, TTT beat the market even during regular trading.
I expect there was likely additional funding. In any case, concentrated power can shake scattered massive energy.
All short positions in the market were pulled out, triggering a chain reaction of price increases, and eventually returned to the initial position where Trump had given his speech.
With such strong price fluctuations, the market should either rise sharply again or target the downside, or there should be high volatility; however, the market has suddenly become like a vacuum.
With buying pressure already nonexistent and sellers dying out as well, the market became a fool.
Scattered shorts came in here and there, but TTT, appearing angry, immediately punished them.
This vacuum seemed like a signal that it had detected TTT’s presence. It took no further action. This is because this position is crucial, and sporadic short betting here would inevitably lead to an attack by TTT.
……
Since their (Trump, TTT) manipulation is directed upward, criticizing them risks being seen as someone who wants a market collapse.
However, we must look at the long term.
We need to consider what is needed to prevent the structure, not just the market price, from collapsing.