Do insto’s drive the price movements?

Discussion in 'Sharemarket News & Market Analysis' started by Greedo, 27th Jan, 2022.

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  1. Greedo

    Greedo Well-Known Member

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    This may be 101 stuff to some, so apologies, but this is something I’ve always wondered and couldn’t find much commentary. The recent discussions in threads about the recent price drops due to looming interest rate rises had me thinking about this again.

    I’ve seen comments made that this is reactionary and once the dust settles IR will still be very low and money needs to find a higher yielding home, leading prices up again.

    This suggests retail is largely responsible for the short term price movements.

    This is contrary to my understanding in that valuations will be lower due to the risk free rate and discount rates increasing, leading to lower valuations by the instos/super funds/other funds etc and they have the weight of money to move the market much more than retail.

    Thanks for any comments :)
     
  2. TickerHound

    TickerHound Well-Known Member

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    Institutions drive the market. They're big whales which take weeks and months to build positions. Retail will often drive meme or story stocks, like GME.

    On the intraday timeframe, algos are often a big component of the price moves.

    Why are institutions doing what they are doing? They don't tell anyone so who knows :)
     
  3. Greedo

    Greedo Well-Known Member

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    Thanks @TickerHound
     
  4. Zenith Chaos

    Zenith Chaos Well-Known Member

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    Every purchase and sale drives a market movement.

    Instos buying and selling large quantities make a bigger impact.

    Do instos make intentional changes to the market without large trades or with shorting? My guess is yes. I have witnessed manipulation of the spread through selling and buying trades less than $20. I am sure they pump and dump o and vice versa. They probably do the old Rene Rivkin trick of socialising a stock, which by definition will pump the price, and then selling when overvalued. They could be using forums and other internet channels like Motley F00l.

    Even this forum could have insto spruikers.

    As a matter of fact, this hedge fund manager told me about a share that is certain to rise called HAH. Get on it to make money and tell only your good friends......
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    The code alone makes me wonder who'll have the last laugh.
     
    Zenith Chaos and PeterCr like this.