Analysis Class for Beginners Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Analysis Class for Beginners

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Arthur Tang who wrote (1116)	1/12/2000 7:13:00 AM
From: Arthur Tang	Read Replies (1) of 1471

A quick lesson in market making? A company starts with an underwriter, then gets SEC to approve a prospectus. Underwriters will try to sell the issue to their customers. Underwriters will spread the risk or build a larger market by having a large group distributing the stock. The market of a certain stock is therefore limited to the brokerages who handled it. When you invest in a stock, you have to know the large stockholders and the market makers. It gives you the background of the size of liquidity(both stock and cash pool)in the market. The secret of market making is the philosophy of what makes investors buy and when will they sell? The market makers balance the market by raising(move)the price to sell their inventory and lowering(pull back)the price to buy back the stock. In technical analysis terms it is oversold(market makers have too much inventory) and overbought(they borrowed too much stock from brokerages). Secret of TA Elliot wave, is five waves, three going up and two coming down; which ends a classical market making process. The two wave coming down is 30% down and then 70% or 90% down to finish the cycle. The waves going up maybe 300% each year. The Elliot wave is best done coincidental to a business cycle. Today, the economy based on obsolescense and replacement made Elliot wave theory impractical. But it still fits some stocks because the market makers did not have liquidity of the stock. Sometimes, "Blowoff" or "blowout" , the peak of the third or middle wave, may happen if stock is hopeless. "Head and shoulders" happens when market makers were caught in a temporary short squeeze. Good luck in your investment strategy, buy and sell with the market makers never against them.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next