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Biotech / Medical : LJL Biosystems, Inc (LJLB)
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To: GraceZ who wrote (36)3/21/2000 11:50:00 AM
From: ahhaha   of 90
 
Precisely. Bids are pulled. The MM buys 100 at 1/4 away all the way down with individuals occasionally buying 1000 at market. The net is that no money has left the stock on-balance, but the price translates to the extreme where it is considered cheap. Then the process reverses. The repetition of this dynamic process asymptotically approaches the intrinsic value. That value is the material worth of the company amplified by reasonable expectations for future growth in worth. On the upside offers were pulled.

Currently the book is loaded with sell orders above. That means there is plenty of liquidity above and MM isn't needed to supply stock. The marginal demand eats through the supply above. In this regime there aren't many market orders to sell. This reflects the psychology which is, "if it will just get a little higher, I'll sell".
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