I've been watching that for several days now, here's my interpretation of the data.
If you believe the Thomson I-Watch data, there's very little institutional selling going on (because the institutions who wanted out were all out long ago), it's mostly buying. If you add up the volumes for today, you'll get a net institutional buy volume of about 8-9 million shares. The pie chart shows that the institutional and retail trades reported through the Autex system are only about 15-20% of the total trading volume, that's a major reversal for AOL since it's usually 65-75%.
So what's going on and who's doing all the selling? We, the small investor dummies, the 8 million online investors, that's who! If you track through the SI threads of the internets, Dell and other stocks that have been been hammered over the last few weeks, the pain and suffering is pervasive. Lot's of margin calls, forced cash infusions, no buying power, tons of selling of AOL and other stocks, either forced by margin calls where people bought in too high or to preserve profits if people had a reasonably low cost basis. Maybe the market makers and the institutions are helping this along a bit, but I'm convinced that it's the small investors who are getting burned here.
Meantime, the institutions are steadily soaking up just enough of the selling volume to keep the stock at its present lows or even force it lower. Where/when will it all end? Not until all the investors who can't hold on are forced out. The usual sign of this would be a huge volume day (say 60 million shares plus like 4/19, 4/20) with the price change over the course of the day about zero. We haven't had that kind of day yet, so my guess is we'll go lower before we recover.
David T. |
