Key insights
- The author suggests unusual trading patterns in the Mag7 stocks, characterized by low-frequency buys artificially inflating prices and wide spreads in after-hours trading. This creates a 'volume vacuum' and raises concerns about potential market manipulation, possibly targeting passive investment strategies. The author speculates this could be a precursor to a significant market downturn or a mechanism to extract value from the bull market.
think of it like walking on water bed. the surface looks smooth, flat. but you step into it and you sink deep.
the tape is full of low small frequency buys pinning price up and creating a sense of strong demand. but when a lot hits the bid, the price recedes rapidly. in after hours trading the spread is enormous. on nvda for example there have been fills tonight below 172 and above 190.
Theres a new mechanism at play here - pricing everything much higher than the trend which has been bullish overall but well beyond rational.
this is also causing a volume vaccume becouse investors are left wondering what the hell is happening, and for good reason. its as if a vail has fallen over the bull market to force buyers into a bad deal. this could be the precedant for a trap, or liquitity trick that goes well beyond the realm of everyday understanding (the fed maybe?)
Either way its a spooky situation. might be a setup for passive invesetment strategies like 401k's which typically dont look deep enough to catch something like this right before a big rug pull, or a way to sap value out of a bull market in an anticipatory fasion. something like this requires billions if not a trillion in solvancy to accomplish. i guess we will find out soon enough.