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Strategies & Market Trends : From the Trading Desk

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To: Gary Youree who wrote (2074)	12/16/1997 6:02:00 PM
From: Robert Graham	Read Replies (1) of 4969

Again my assumtion..which may be wrong..was that the majority of heavy volume were longs..not short covering. From what I understand, short covering does leave its tracks on the tape. So even though you cannot be sure, by knowing and following the short activity on the stock in published reports and also what you can derive possibly through recent news items, like a stock having the earmarks of a good short candidate, I think with tape you can make a good guess when short activity has entered the picture. I have never attempted to verify the tape of short activity. I do not even know if this is possible. But from what I understand, short activity among other things causes a very quick and irregular upward movement in the price of the stock. Also, short covering activity doesnot have a lasting effect on the upwward movement by the stock. A rally caused by short covering is comparatively brief. Just my two cents. Any thrughts or comments on this? Bob Graham

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