Hope this helps.
The Super Messages are only PRE-trade data - thus, the below conclusion that
"the triangles did not cross the price lines - that means, they never
*actually* bought." is incorrect. It is not possible to tell whether or
not a Super Message translated into a block transaction based on I-Watch
charts since there is no post-trade data included. The only post-trade data
on I-Watch is the Reported Trade Pie Chart.
The data on Thomson I-Watch is only part of the trading picture and should
be used in the broader context of the trading session. The interpretation
of the data is unique for each stock/sector. Logically, a bid represents an
offer to buy stock so it should put upward pressure on the price while a
sell offer theoretically, will put downward pressure the stock. The side
of the market that the super message is on, marks the side on which the
trade is being initiated. When a broker offers to buy 100K, he/she is
actively looking to attract the attention of someone willing to sell.
Typically, the aggressor of a deal ends of paying the premium so if the
broker really wants to buy that 100,000 shares, he/she will need to strike a
deal with the seller which will most likely result in some type of upward
pressure on the stock.
A good way to think about the I-Watch data is as a basic measure of supply
(red triangles) and demand (blue triangles). As the price goes up, the
number of people willing to sell goes up as well - supply (red triangles)
increases. Thus, as a stock's price increases the number of people willing
to sell into the rise increases, also.
In the scenario when the stock is moving higher and there will often be more
red triangles than blue - the bidders do not stand to gain much by
advertising that they want to buy stock - after all, who doesn't? The
sellers, however, can attract a lot of attention by offering stock. Also,
you'll notice that while, the amount of stock for sale will sometimes prove
insufficient to counter the buying - it often works to create a cap on the
stock's trading price.
I hope this helps clear things up a bit. Please let us know if you have any
further questions/comments.
Rebecca Lennon
Senior Analyst
Thomson I-Watch
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