Joe,
This is something I picked up from a broker I met (who has worked with Tony Keyes on trading strategies for his newsletter).
When the Bollinger Bands begin to pinch look for a major or sharp move either up or down. Apparently this represents a "face off" between buyers and sellers with the trading range becoming extremely narrow.
If you look back at the TA analysis of TAVA, or most stocks for that matter, you generally see this "pinch" begin to form just prior to sudden move. The key is to look at various time-frames, 5 minute, 15 minute, and my favorite, 30 minutes.
Since TAVA appeared over sold and we definitely had someone sitting on the ask filling a limit order under $11, this led me to beleive the move would be to the upside.
I was correct. (thanks to that tutoring lesson from Yu D.)
What I believe was happening was that the buyer or Mmkr was artificially creating selling pressure either through shorting or selling of accumulated stock, or the threat to do so by displaying the limit sells at $11 on level 2/3 screens. This told the other Mmkrs to but out until he was finished doing his business. Then he would buy at $10 7/8 or cover his short, what have you, at this price.
What we saw was a deliberate and powerful display of market manipulation in order to fill an order below $11. And they triggered a huge number of stop losses on the way down to that price which freed up inventory for them to provide to their big buyer. Even I got stopped out at $11, but I was able to buy back in at $10 7/8, so I made an 1/8 of a point and incurred a tax event in the process... :0)
So how do I read this?? We called cold-cocked by the big boys. Is this bad?? Well for those who got stopped out and didn't jump back in or had margin calls, the answer is yes.
On the other hand, we now have more shares in fewer hands which equates to a smaller float left to handle future small buy orders. Fewer shareholders making individual decisions leads to solification and support of the stock at this price. The only question now is whether our buyer is finished or not and ready to take the stock back up in price.
That how I see today's action. How about it Mr. Flick?? How stands my analysis??
Regards,
Ron |
