The method of market dynamics is to trade the stock market based on its own action. This means do not trade the stock market based on opinions, rumor, news, tips or your own prejudices. When you learn to operate in this way you will realize that stock trading is like any other merchandising business. Those who understand this only buy when prices have been sold down to liquidation levels and sell when they have pushed to over values extremes. These professionals only deal in issues which can move the fastest so as to gain a bigger reward for their inventory turnover. These professionals are the market sponsors.

Every share has a sponsor. These are the people who operate the heaviest in it. By studying intensely the past and present movements of a particular share you will gain an understanding of what is going on behind the scenes and how the sponsors manipulate the particular share.

Stock market sponsorship by a syndicate can be spotted at its earliest stages by a trained speculators. As the stock trading range progresses, volume dries up and volatility decreases. The trading public loses interest and drifts away to more promising situations. A few bottom pickers and stubborn players are all who remain. In a final attempt to wash these players out, the syndicate which operates in this share engineers a terminal shakeout.

This terminal shakeout is usually very quick, and very effective as it drives out new longs who entered during the trading range and new shorts who are whipsawed as prices quickly recover.