The 56 Point TA; Charts With an Attitude Message Board

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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude

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To: J R Hagan who wrote (25145)	1/8/1999 1:56:00 AM
From: Doug R	Read Replies (1) of 79382

JR, After hours trades are not done through the "normal" channels. Most often the buyer and seller in after hours trades are in direct contact over Instinet or some such venue. The record of those trades is then factored into the supply/demand scenario by the "market" in general upon the next open. Hence you get gaps up and down which in essence are technically significant but not "real" since gaps represent this aftermarket and premarket activity. The technical rule of thumb that gaps up are eventually filled is based on the fact that the off market trading in any stock is so thin that the true dynamic involved in the price range of the gap is not fully addressed by that trading. The end result is that the basic emotions of greed and fear are left open to the idea that there must be a conspiracy at work when actually...it's just the way the market works. There's an awful lot of arcane stuff that goes on within the market. But just because it's arcane, doesn't necessarily make it "manipulation". To be sure, there ARE instances of manipulation out there and one should always keep that in mind. If you want to take a very broad definition of manipulation then it might be said that the whole market runs on it. Is an analyst's upgrade manipulation? Legally...no. The bottom line is supply/demand. The trick is to ferret out supply/demand situations that one can profit from. The question of manipulation can be rendered moot if that is done properly. As far as HNV is concerned, I don't see any tendencies toward illegal manipulation in the overall chart. I do see that the supply/demand situation is currently favorable and improving over time. If that changes, I'll sell. I try not to get too concerned about movement due to individual trades...but sometimes it's tough to do. I hope that somewhere in all this rambling I've answered at least part of your question. Doug R

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