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Biotech / Medical : VVUS: VIVUS INC. (NASDAQ)

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To: VLAD who wrote (6031)	3/21/1998 6:15:00 PM
From: Jon Huang	Read Replies (1) of 23519

VLAD, what you have described on Friday's action is simply Merril Lynch's market maker's routine daily trading action. Since on Nasdaq, market makers can short on a downtick as well as on an uptick, which means they can sell short on the bid side even when the stock is downticking. This simply gives the mm an edge over us because once they received or knew a large sell order is on the way, they can take an appropriate action (such as short selling) ahead of the time and makes a profit that way. Also, you forget to ignore the fact that Merril Lynch has lots of clients. One client might be selling at 10 3/8 while another might be buying at 10 5/16, therefore the same mm might be acting on behalf of 3 or 4 different clients while he's not taking part in the bid or ask himself. On the note regarding short sellers supporting the price at mid 9s, all I'm trying to say is since there's a strong support at mid 9s, according to the charts, short sellers may see that as a temporary support so they will cover some of their shares and take some profits off the table. Together with many traders going long side, hence they create this psychological support. good luck, Jon

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