Again, you are not listening to what I am saying, you said:
"GSCO may be on the ask side, but another house may be making the sales, without showing up on your Level II. You overlook this"
If GSCO is on the ask side and another house is making the sale this is what drives down to bid and the price. What you can tell from a level II is anyone who is buying from GSCO when he is on the bid alone and doesn't move. This is clearly GSCO selling the shares. I've bought thousands of shares this way from him, it tells me because everytime I buy shares it tells me which MM sold them to me. This is how a level II works. Sure we get this information on the screen, but its how you organize this info. dynamically that helps you.
You Said:
"Yes they have been on the sell side a lot, and probably even selling a lot, on behalf of several different mutual funds and institutional investors. But so what? All that tells us is that a lot of money managers want to get out of this stock right now. But we already knew that from looking at the price chart. "
But so what. Its crucial information that's what. Its not important if you just look at this on a certain day, but the information gathered on a ongoing basis is very valuable. Its easy to determine that some house out there is using GSCO to trade this stock, so sure its important to me finding out who the big MM's on this stock is, because anytime they buy or sell this issue it gives us a indication to some selling or buying pressure going on, especially when this amount of volume is concerned.
Unless you sit there and constantly look at these MM's & what is happening during market hours (which I am sure you don't, and if you did which is still impossible). your argument is your opinion, and is incorrect. We have the hard core data to back this because our system goes beyond the visual basis of the level II which you and many others see. We collect this data on a daily basis about all MM's on any stock. By doing this we can see what a MM's net position is and how he is trading this stock, daily, monthly, etc.
I sympathize with you and how you are stuck on this one belief. I can understand how that can become frustrating without all the facts. Its like driving a car with a blindfold while taking directions from someone who can't see.
A level II gives you some direction or idea of what's happening but what's happening in the background is more important.
Good Luck Investing...... |
