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Strategies & Market Trends : Analysis Class for Beginners

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To: Arthur Tang who wrote (722)	3/6/1998 10:36:00 AM
From: Arthur Tang	Read Replies (2) of 1471

Market making revisited. Market moves up, the trend can be established by trend lines in technical analysis. How does the specialist and market makers handle the unbalance and borrow stock to even out the market? If we look at the 3 month charts by the close and high and low price on volume; we can see the inbalance. If we see overbought, we have to expect some pull back. We have to look at the 1 minute interval intraday chart each day to get the date that the short interest will be balanced. Then, either fundamentally or technically the stock will breakout or breakdown, so we can predict a change. On the other hand if we see oversold, what an opportunity for investment on the short term. Most of the time, if it is not a story stock, the market is not going to move. Market making is just matching buyers and sellers for their personal needs. The volume will be extremely low. Market making will resume again, after lengthy base building. Peter Lynch likes to think it takes two years. IN THIS ECONOMY, and if management has a program, the excitement may be much sooner.

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