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Strategies & Market Trends : Classic TA Workplace

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To: GraceZ who wrote (57135)	10/20/2002 7:34:02 PM
From: UnBelievable	Read Replies (2) of 209892

So You Think That The Rally From October 10 Was Spontaneous? A real rally is one based on people buying stock based on an expectation that they will be able to sell it for more in the future. What we are seeing is people buying stock not because they expect to profit on the resale of that stock but to induce others to invest in the market either to enable them to distribute inventory at higher prices or because they are compensated based on assets under management not based on performance. One of the reasons the ups are so fast is because they are designed to raise the price as much as possible for the least cost. Once the price is raised it is then allowed to drift down while distribution takes place. This type of activity is seen in the repeating waterfall patterns in the charts. With regard to RP's the actual decision concerning the amount of RP's is generally made either prior to to simultaneous with the open. The days activity can is then based on that. In addition the FRBNY open market trading desk is in continuous communication with the Primary Dealers and it is through this communication that the activities of the major firms are coordinated. This post from yesterday, which is based in large part on information from the Fed makes the process fairly clear. Message 18134130 The Treasury Department and The Federal Reserve have made it clear that they can and will intervene in the markets to maintain stability. While they do not say they have, neither will they say they have not. The history of the Federal Reserve makes it very clear who gets to determine the definition of stability and the course of intervention. Message 18134476 There is nothing invisible about the hands that are moving this market.

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