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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 232.38+0.1%Dec 24 12:59 PM EST
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To: Glenn D. Rudolph who wrote (6858)6/20/1998 1:51:00 PM
From: Peter Church  Read Replies (1) of 164684
 
I am thinking about how this amzn stock trading machine works. Correct me if I am wrong but if the float is 5,000,000, nearly every day for the past week that number was exceeded. The stock is being churned by the same groups every day. I am trying to understand the pattern of "rise in the morning and rise in the afternoon" with an interday Siesta.

Here's an hypothesis: There are two groups of major bullish players--the early morning Buyers and the early morning Sellers. The morning Buyers are stronger and more aggressive than the morning Sellers. However, in the afternoon, the stronger Buyers slowly unload their shares to the weaker Sellers causing the afternoon trading lull. At the close, the strong Buyers move back in setting up the closing rally. The two groups have been on a honeymoon for the past two weeks. trading steps twice a day.

If this is true, the afternoon volume during the lull would have to be twice the morning volume. Can anyone confirm that? The picture looks like a standing sine wave beginning each morning at full amplitude and making a complete cycle each day. The trick is in the afternoon lull---how to sell shares from strong to weak hands without lowering the price.

If true, I would expect a major selloff to occur in the afternoon. That is when the weaker players are holding shares, but the stronger players have divested. If the stronger morning Buyers choose not to buy the stock in the afternoon, that leaves the weaker players holding the shares setting them up for a fall the next morning.

If I were a bull, I would be buying only the morning rally and selling in the afternoon. The afternoon rally is the most risky. As a bear, the best time to short would be if the afternoon rally fails.

Just an hypothesis. Any thoughts?
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