Liquid Media (NASDAQ: YVR) had a 100% and more price jump last week. We said that this all very much had the flavour of market manipulation. The problem was the flow of orders in YVR. If a price is rising because lots of people want to buy it then we see an order flow of lots of people buying in the sort of size that they can afford. On the other hand, last week in Liquid Media we were seeing this sort of thing:
Liquid Media share purchases from NASDAQNow, that's not proof positive of anything, as we said it wasn't. On hte other hand if someone was trying to manipulate the YVR stock price higher then that is the sort of thing we'd expect to see. Some ‘bot programmed to buy, in v small lots, but to do so enough to create some momentum for the stock to be higher.
What then happens after such a ramp up in a tock price is of course that those manipulating the market sell out of their now more valuable positions. And, as everyone realises that there is no particular reason why the stock should be higher then it stops being higher.
Liquid Media's stock price is rapidly returning to where it was before all of this started.
Now, of course, absolutely none of this is proof of anything. But we do recommend trying to read the trade order flow whenever there's a large stock price movement. Sometimes it really is people trying to manipulate the market price to their own advantage. And the problem with that is that if we buy in on the basis of the manipulation then it's our wallets that fund those of the manipulators.
Thin markets in microcap stocks are notorious for this sort of behaviour. Not, this doesn't mean that every price movement in a penny stock is caused by manipulation. But it does mean that we should seek out real reasons for a price movement in this sector. Also, check that trade flow ticker to see if we can spot the obvious signs of manipulation.