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Strategies & Market Trends : DAYTRADING Fundamentals
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To: marketbrief.com who wrote (4091)9/16/1999 6:45:00 PM
From: Rick Faurot  Read Replies (2) of 18137
 
I'll take the bait and disagree. Increasing size and quantity of bidders indicates a strengthening stock that is more likely to go up; increasing size and quantity of sellers indicates a greater likelihood of a decline in price. This is only a very general rule and a stock can change directions incredibly fast and wipe out a huge bid and go south for a variety of reasons: selling in the markets, bad news on the stock, etc. Stock action in the short term is regularly manipulated by dealers who display large size on the offer or bid. When this is done on the bid it is known as "juicing." Typically an INCA bid of 10k or more will appear on the inside bid or a tick below. It can be up to a 50k size at times. This may be a legitimate bid but more often it is put up to force a stock to run. This may be because the action is slow and the dealers want some action, or someone may have a bigger purpose in mind. Regardless, the juicing will normally cause a distinct upward pressure in the stock and often the stock will start to move up promptly. If the juicer is serious, he will up his bid as the stock upticks and chase it up the ladder. GSCO often does this and has the power to make it work most times. The same action works just as well in reverse. When GSCO or whoever the player is has the stock run up to the max, they will often flip to the sell and show up a big size there, running the stock right back down.

TA traders who want to avoid this "noise" look at fifteen minute charts and ignore the L2. Daytraders don't!

Rick
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