<Pat, who doesn't trust any system 100%>
Respectfully noted - I concur.
What do you think of this explanation:
"JDSU opens with a huge upside gap of over 20 points. News of inclusion into the S&P500. THE hottest, fastest growing business in the world. Shorts will have to cover. Front runners, knowing that the stock will have to eventually be bought by all S&P 500 "indexers", join the buying frenzy"
This news is broadcasted to every corner of the investment world, and circles the globe countless times through the Internet. Anyone who has ever heard of JDSU gets the news. Those who must make a "move" to sieze the opportunity proceeds to act (either buy, sell or hold).
The stock opens at a fantastic price of $128. Shorts are aghast. Longs are ecstatic.
It spends the rest of the day wallowing around mostly below the opening price, unable to advance and hold gains above $128 for very long. The intraday downdrafts suggest that people are more anxious to let go of the stock, than to accumulate more at today's prices.
The stock closes at around $126, below today's opening price. In fact, this right around the weighed average cost of all of today's trades in JDSU. That means that those who bought today paid an average price of $126. Those who sold got an average price of $126.
There is no NEW news on the company overnight, and the market is neutral.
Now, if the stock fails to follow through the next day with significant gains, are the odds of it going up/down still 50/50?
I'd wager that the odds favor profit taking...
Let's see how it closes. Looks like it's going to be around $128... |
