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Technology Stocks : AUTOHOME, Inc
ATHM 20.90+1.1%Feb 6 9:30 AM EST
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To: E. Davies who wrote (20795)4/12/2000 9:34:00 PM
From: ahhaha  Read Replies (2) of 29970
 
The stock will rise in spite of news.

Selling is being done by small fry into strong hands. The observers see that selling has little or no price concession. 96% of the trades in the last hour were on down ticks but they didn't make much headway. The failure of selling to make headway encourages buying and the buying goes initially to the book since that's where the assured supply is.

As soon as a little upside develops, the sellers stop selling market and book to sell. A little buying sends price up smartly, but it is selling that enables the upside action, since the buying isn't arresting shares from someone else. When you hear people get into this chicken and egg stuff when they make comments like, "for every buyer there is a seller", they are implying that there is no net force. Well, there is.

One side wants it more than the other wants to keep it. In this case it is the nature of selling which is important. The buying is small and inconsequential, but it is inelastic since the sellers easily give it up by booking. When the book is thin above they aren't giving it up easily. They're hanging on to their shares because they know some greater fool wants them.

That's when the market maker makes the fools pay up and shorts to supply them, because they agree with the fools. They can see the infinite upside taking them to short sale ruin and resent how much they will lose. However, they're required to do it and that's where the market makers make the dough. The market forces the market makers to make money against their better judgement. This truth is completely at odds with the nonsense the public chooses to believe in their search for The Final Conspiracy.
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