RE> ominous << what's a little thunder storm , fair seas do not
make a sailor, so the shorters are flooding the gates, so what
do't think so many shares are really trading hands, they are not,
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The volume is mostly ghost volume, the brokerage houses see the
shorts place the orders on the bad news..as so many orders come in
the brokerhouse has to call around and get shares to loan out.
( some Funds even get paid interest on the shares they let the
brokers borrow ) ..the house pays that , and for a seat on the floor,
so they short for themself first for as many as the incoming orders they get, ( now every time some one closes a short position the
brokerage house closes there oun first ( they always make a spread most people don't see ).. does this rip off their client , all
depends on how you look at it.
Now the orders go to the exchange via the brokerage houses and
they can see the flow of things, if and when the big buy orders
of real stock come in they close their short positions first.
Then the buying starts, then the other shorts that have stop
losses in place start getting stoped out..that's not the case
yet..the brokerage houses are still filling short orders, in
some cases now it looks as if they are closing their own shorts
as they "buy ghost shares" from the new shorts coming in..
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Meanwhile they make the commissions too..
Individual shorters have no idea of the odds they are up against
the guy who buys the shares from you that don't own, is often
covering his open position, as he sold shares he didn't own
ahead of you..and has got an inside picture of the flow..he
is always making the spread ...don't think for a minute that
all this volume is "real" shares trading hands..it's not..
not even a third of it is real..what it says is shorts are
piling in and the brokers love it..they get the comis..and a
spread..as they trade just in front of the market orders they
get. The more she drops now the stronger the rally will be
when it starts.
She traded late today, ( the borrowed stocks ) last trade
was 23-5/8..
The tug of war right now is more between the shorters than the
bulls or bears..they are each seeing who the can pass the match
to..as it burns down the ones holding the short end get burned
in the end. >> ominous << :-)
The Bulls lose nothing as long as they don't sell, as you never
lose or make money untill you sell, ( unless your a shorter..
80% of them get burned, but they don't admit it ) the house
is the one with the edge, always and it holds about half the
short interest..and "knows" when to cover, and can cover ahead
of any buy orders or other shorts covering.
Chances are the shares I bought today, I got from some shorter
shorting..if I knew who he was I'd thank him, as I doubt I could
have gotten her that cheap any other way. Maybe they will sell
me some more tomorrow.
Jim
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