Daniel,
TraderAlan makes some good points (see 1839). XCIT has a thing about 40 the way ASND apparently does about 50. XCIT just shies away from forty most of the time. If it breaks it, it runs to 41 fast and then stops there, but then pulls back to its "comfort zone" by day's end.
As you suggest there ARE lots of trades that aren't part of the L2 lineup. Selectnet and Instinet trades do not appear on L2 and there are tons of them going on at times. I know of no way of identifying who has done what trades via TOS.
I think Alan's post confirms something I said earlier: know the stock, especially if you wish to trade it after 12:00 EST.
Another thing about your example: MMs who display on the bid have lots of ways of avoiding actually buying stock before they have to cancel. One of the numerous advantages they have with L3 that we don't have. It is worth noting that the MMs will do everything they can to fool daytraders so you have got to go the extra mile to outsmart them or you will be fishbait way to often.
I close by saying this: normally the L2 screen is an indispensible way of gauging a stock's potential direction. You just can't take it at face value and you must take all the other factors into account. I am very interested in Alan's TA approach, for example. Market action, time of day, day of week, time of year, Greenspan, Clinton, Asia, dollar/yen..it all comes into play.
Rick |
