I don't though agree that day traders stabilize the market. Look at it this way. Every player that might be a good deal is bid on by day traders up to the point that the player is no longer a good deal. What this means is that people looking for players longer term have no choice but to bid past the point where day traders stop. This his the exact effect of driving up prices because this essentially puts the starting price, for those who want a permanent player, at a rate already above what would be considered a good deal.
On the other hand, if you put yourself in the shoes of the person who is
selling the player, bidding a player up guarantees them that they will get fair price on their sale.
There are two things that you're missing: first, if we assume there is such thing as a fair market price, daytraders cannot bit more than, say 70-80 percent of it if they want to make any profit from the resale. Second, I don't see how buying a player for 80-100% of its market price can be considered a bad deal.
"I don't know half of you half as well as I should like; and I like less than half of you half as well as you deserve."