If you go back to two years ago, AMES went down to $8/share and quickly bounced back to the 20s. The leading market maker was Salomon, Smith Barney(last year shorted all the way down to $28); I knew the people in charge of the bull pan well. Today, the lead market makers were Herzog (shorted around $22) and Bank of America(Fidelity Johnsons are the customers). The shorts were unmanagable at over 2.4 million as against 600,000 shares two years ago. They have to buy back, taking advantage of the Greenspan foolishness. They pulled back, but strong buyers came in and took all the stock, which they expected to buy back. You did too, but the more you buy the more the market maker shorts thus the lower the price.
In six month time even if AMES makes a lot of money in X'mas time. The stock could be forced to stay down. Witness DELL still could not exceed the $50 bracket, which was below the cost of Merrill Lynch's shorts ($65) to one big customer of theirs.
There are two ways this stock will change. The people who shorted buy back from their own customers when their customers give up or take profit. Or, they sell their shorts to another market maker, who can recover the shorts if Johnsons sold partially. It is done all the time.
I am still holding under this terrible fate of destiny. My cost was $1.87/share. AMES insiders bought because of their momentary optimism but they are not cautiously checking technical imbalance or the slowness of retail in the summer with Greenspan's foolishness.
Watch the Nasdaq published shorts, and take profits whenever the stock moves. You could scalp the market makers and recover some of your investments plus some profits. Think daytrader's way, trade technically. Wait for AMES to recover fundamentally. The trend is up. But Jefferies was the lead market maker last month in June. Who knows what they can do or could have done this month in setting prices? |
