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Strategies & Market Trends : Rande Is . . . HOME

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To: Qone0 who wrote (49144)	3/15/2001 12:09:12 AM
From: velociraptor_	Read Replies (1) of 57584

I agree Robert and this is an element which I failed to add in a sufficient way. It does work on the upside as well but this is where volume makes the distinction. Notice in the charts how it took a lot of volume to take the shares up both only partial volume to take them back down to the same level. Thus, the rest of the volume is still holding at higher prices and yet the price is back to where it started. It's like if I had a stock which I bought at $10 and sold 1 share to 1000 people for $12 each due to increased demand. Now imagine the demand diminishes and sell pressure increases. I could buy back 500 of those shares at only $6 a piece because that is all I am willing to pay and the seller agrees because there are no other buyers. 500 people still hold their shares at the inflated prices, yet they are now only selling for half price. If the other 500 sell as well it inceases the sell pressure even more and continues to drop the price. This is what we are seeing and ultimately results in the destruction of wealth faster than it was created.

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