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Strategies & Market Trends : Analysis Class for Beginners

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To: Arthur Tang who wrote (655)	11/9/1997 10:54:00 AM
From: Arthur Tang	Read Replies (1) of 1471

By observation of negative or positive feedback used by market makers, the small investors feel safer investing into stocks which market makers do negative feedback to control the stock price and excess demands. The wonderful positive feedback, that some market makers do (very few and far between) attracts momentum players. But, the excitment sometime is very short lived. Day traders love it. The momentum players, however, rush every where, leaving some long term investors in the dust. Many charts bare out this type of market making. It takes a long time to recover the large position of borrowed stocks. Companies some times got hurt by this technical problem, losing the ability to finance by issuing stock. Market makers or specialists on the board of directors of companies should be more responsible than those who are not.

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