And then of course if the smart money knows the earnings will be a miss, then the shorts hit hard again and the dumber specs take flight on the big stock price drop then the shorts cover at the low, low prices. I believe this is your postiion, correct?
OK, I understand your persepctive now. I would agree that if the shorts, or what's left of the short interest, are the smart money then they could have covered by now. There also is the possibility a huge portion of the shorts are dumb shorts. I'm not saying that it is likely, but another possibility.
So if the shorts are the smart money and are the players manipulating the stock then it is likely a big move up is not necessarily in the cards yet. However, if there is a considerable earnings beat the smart money in this scenario will have to do some defending. Of course, it also is a great opportunity for them because a big earnings beat will attract a lot of dumb longs that will scamper quickly if the stock doesn't do what they expected, i.e. they are looking for a quick buck and when it turns south unexpectedly they will sell and probably for a loss.
The smart money has better information regards earnings, but it may not matter to them. They can CONCENTRATE capital and make the price go the way they want and everybody else will follow their lead. So the "report" will be judged not on it's merits but on the resulting price move. So if you say you think the earning report for such and such will be good or bad, I would say it doesn't matter what YOU think. It only matters how the smart money is positioned.
The tutes have better info then the specs too. but are slow to react because they can't get in and out quickly because of their prospectus requirements and without affecting price. Like a fat lady getting into a bathtub with 1" of water; it overflows.
The specs, that'd be us, are dumb, in the dark, have only the information publically released, BUT we are fast and nimble.
So in SKUL the tutes have been turning their Titanic around going from 75% to 54%, as of Dec 31st, could be less now. The smart shorts have reduced their position, also slowly despite the fact that there has been significant selling days followed by trading ranges for them to cover, but they did not significantly do that.. So if they were not covering, and the tutes are not buying, then that can only mean the dummies were buying. And the dummies don't and can't decide to take up the price because they are fragmented; they cannot CONCENTRATE capital.
And the point is? If I understand you correctly your perspective is that dumb institutional money is getting out late and selling to even slower reacting dumber money specs? Is that correct? So if the whole idea here is to distribute to dumber specs then the shorts will want to hit hard prior to a catalyst, such as earnings, perhaps even doing some short selling now, or on the 11th and 12th when there was good volume, to distribute to the dumber specs. Is this your position?
Well, some specs are slow, but the vast majority are quick to sell out if the trade goes against them. That is why it is not good for the stock to flow into spec/dumb hands. Obviously that is what is happening during a mark-up, stocks flowing from smarter money to dumber money, and then eventually when every dummie who wants to buy has bought (buying climax) the smart money distributes the rest of their inventory in a distribution trading range and get short for their next campaign to mark it down.
But here we are at a point where many dummies are saying it is at low, but it appears the smart shorts are not reversing their position, at least not fast enough imo. There hasn't been a selling climax yet. It won't be ready to move up long term until the smart money goes from short to long and that's going to take longer imo. In the meantime, trading range or maybe even lower price.