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Microcap & Penny Stocks : Dollar and Under Sleeper Stocks
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To: Esteban who wrote (1812)11/8/1997 4:47:00 PM
From: Alan Coccio  Read Replies (3) of 8835
 
Esteban, I had to jump in here to, perhaps, give you a tip on the PC Quote. I use S&P Comstock which is the identical program put out by Townsend Analytics. They just use different feeds for the data.

Here is how you can determine whether each trade is a buy or a sell: Go to "Design" at the top of the page and then click on "Marketminder." One of the choices under "setup" on this screen is the "MoneyFlow" indicator. I set up a mini-screen to overlay the time&sales screen with just the symbol and MoneyFlow. Each buy will add to the moneyflow and each sale will subtract from it. That's how you can tell whether each trade - even in the spread - is a buy or sell. Further tip if you don't already do it: you can link both the time&sales screen and the marketminder screen to the Level II screen so by entering a symbol in level II, you change all three screens at once. To do this just right click on the level II screen and you will see the command to link screens. Hope this is helpful.

Gary (GaBard): I agree with your general premise about how the market makers are taking the price down but I see it happening with sells not buys between the bid and ask prices. The new rules, as you know, are only applicable to the Nasdaq/NMS stocks and not SmallCap or Bulletin Board stocks. That doesn't prevent the Market Makers from playing the same game however. I have done this several times to prove it on NMS stocks. Enter a sell order on an NMS stock between the bid and ask and you will immediately see the ask price change to the lower price of your sell order. Cancel your order and the ask price will revert to where it was. As I say, I have done this several times to prove it. On the Bulletin Board stocks, since I have an indication of whether each trade is a buy or sell that I can see immediately, I am seeing sell orders trigger the downtick. The sell in the spread lowers the ask price which then starts the panic since many investors immediately think the price has hit a top and is about to plummet. It becomes a self-fulfilling wish many times. It also allows the market makers on the bid side to lower the price - as you correctly pointed out - and the rush is on. The market makers are taking full advantage of this to shake out the weak hands and pick up shares at greatly reduced prices. So the bottom line is that I agree completely with your analysis of what is happening and the game that is being played but I believe it is sell orders rather than buy orders that are the trigger.

Al
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