Today’s special report is on the recent attempt to move Ironwood prices prior to Halloween. This material has been trading consistently at around 300 per piece for several months now but is starting to trade consistently above this number in the past week. Some successful merchants are selling as high as 350 per piece.
This looks like a bull trap to us. This is a type of market momentum that seems to show a upward trend in prices that can cause a rush in selling. However, it’s usually a false signal, meaning it is likely to return to a lower price point in the future. The idea in this type of manipulation is to try and make a short term gain from the market’s ignorance while sacrificing a long-term position. Because wood is a premium material, it is more susceptible to this type of behavior than other types of material due to the anchoring effect. I presume this price adjustment is in preparation for the upcoming Halloween update which happens every year.
Also, a trading company attempted to raise prices which, due to poor price maneuvering and low volume, is not having the desired effect on the overall price point. Instead, they are sacrificing hundreds of potential material sales in order to drive the cost up a total of +$8dbs per piece. We’ve seen far more successful price manipulation attempts in recent months, so we don’t expect this one to last long.
However, the bigger reason for the post today is to pass along a cautionary note. Ironwood trading, as well as any other attempts to manipulate wood markets, will be muted once the announcement is made for the Halloween Event. This means your price correction attempts may not work unless they are subtle enough not to be noticed. We made this decision based on our experience from the last major economic event and don’t want to be a contributing factor toward that kind of abuse. We will remove this restriction as soon as the event ends.