According to the Securities And ExchangeCommission Report Of 1963 and I quote,

"
The Control specialists have on prices is nobetter illustrated than at the openi
ng. Although itis impossible to isolate one aspect of thespecialists activities
as the most important, anyranking would have to place the arrangedopening high o
n the list
"

HIGH-FREQUENCYTRADING
9 Implementation Shortfall with Transitory Price Effects 185
Terrence Hendershott; Charles M. Jones; Albert J. Menkveld
University of California, Berkeley; Columbia Business School;VU UniversityAmster
dam
10 The Regulatory Challenge of High-Frequency Markets 207
Oliver Linton; Maureen O Hara; J. P. Zigrand
University of Cambridge; Cornell University; London School of Economics and Poli
tical Science
Index
.They go on to say and I quote
"The heart of the problem with the Stock Exchange is thespecialist. If there was
to be any reform of themarket it should be with the specialist"
.It s sad to say but none of the findings or resolutions, which addressed speciali
stshort selling, has ever been implemented.What the Commission stated was that w
iththeir controlled opens and closingsspecialists were "
rigging prices
". TheSecurities and Exchange Commission hasbeen a captive of the Stock Exchange
andits insiders since its inception in 1934.
Arranged Openings
:There are five important ways thatspecialists handle prices at openings.
1)
When you have a dramatic advance atthe opening while in the midst of a generally
declining market. The function of thisadvance is quite simple. The specialist ha
saccumulated an enormous amount of inventory during the decline, and what thisra
lly does is two fold.
A)
It keeps the public from continuingselling at what are still retail price levels
.
B)
It forces the public to rush in and buystock. This is what enables the specialis
t tounload his inventory and sell short.It is still the basic scenario of wholes
ale andretail merchandising. When they drop pricesthey are looking for the ultim
ate wholesalebottom,
possibly conducting several shortadvances along the way to unload inventoryand
sell short. Once they have achievedtheir low wholesale prices and are flushedwit
h inventory budging from there shelves,there next function is to rally to retail
tounload the stock at its highs
with severalshort declines along the way to re-stockinventory, before reaching
the ultimatehighs.
2)
The next opening is a dramatic declineas specialists approach to within 50 to 75
points of a rally high. The function of this isagain two fold.
A)
One reason you have a sharp declinelike this before you go to a high is becauset
he specialist never allows the public, whichhas been buying at current prices to
sell atthe highs. Before going to the final highs thespecialist will conduct no

t one period of decline but a num