Hello Mike,
Thank you for the kind words and support with the podcasts; it is truly appreciated!
You're right that short sellers can trigger stops. No question about it. However, that is nothing more than a variation of long positions meeting the demand. I understand your point that short sellers could "force" the stops to be triggered. On the other hand, one could argue that if the longs valued the stock at a higher price, they wouldn't have the stop set at that price.
It's important to understand that whenever a trader shorts a stock, we know that they value the shares less than current equity holders (long positions). However, we cannot be sure that any current long positions value the shares less than that price. But once a long positions sells, whether from a regular sell order or a triggered stop, we now know that some equity owner values the shares less.
As new information hits the market, short sellers may, in fact, place downward pressure on the stock. If that happens to trigger stops, it is just different investors (long positions) meeting that demand as the price falls. My point on the podcast was that someone from the long side must sell the shares. Whether it happens from a single shift in the demand curve (as I assumed) or from smaller shifts in the demand curve (which is what happens when stops are triggered) the result is the same -- long positions must value the stock less than the short sellers. It's just a simpler model to assume a single shift in the demand curve.
Of course, as you mentioned, if unscrupulous players could see the all the stops, there could be issues of what is called "calling in the stops," which is a possible risk. However, in the Nasdaq market, no single player can see all the stops so it would be difficult to organize.
For a listed security, the specialist can certainly see the order book, which means he could construct actual supply and demand curves from the data -- a huge advantage for sure. But that's exactly why they cannot trade for their own account. They can only take the opposite side of transactions and hedge the existing risk.
I hope this helps to clarify my explanation : )
Bill Johnson