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Technology Stocks : Apple Inc.
AAPL 278.79-0.7%Dec 5 9:30 AM EST
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To: OrionX who wrote (28942)10/1/2000 10:48:49 PM
From: HerbVic  Read Replies (4) of 213173
 
Perhaps you should not be so quick to place blame on MMs when a stock is sliced, diced and pureed on Wall Street after such bad news. The MMs react mainly to inequities between supply and demand. If the stock gaps down at the open, it's because the sellers are lining up and the buyers have vacated. His job is to make a market for the stock. He can either start buying at that price and hope to unload later for a small spread difference, or move the offer lower until he sees the buyers lining up again. Remember, the MM is not an investor. He's more like a candy salesman. He doesn't keep his stock for very long.

Perhaps it is a side issue of our instant market communications system that we tend to see the price movements of a particular issue as somehow uniformly controlled, when it is not. At any given moment in time, the price of an issue is under pressure from multiple market forces. There are many MMs that make market for AAPL. If they seem to act in unison, it is because they are reacting to the same forces and to each other and doing so as quickly as the current communications technology will allow them to.

Anyone who seeks to blame the MM is engaging in the art of self deception. In order to cognitively project the probable price movements of an issue, one has to base their conjecture on real facts. Not to do so is to risk considerable error in judgement, which can be costly in fast moving markets. Projecting the MM's actions as a cause instead of an effect of price fluctuations is to ignore the mechanism of supply and demand at ones economic peril.

Regards,
HerbVic
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