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: SpongeBrain who wrote (25091)	1/8/1999 11:32:00 AM
From: ivan solotaroff	Read Replies (1) of 79243

Dan, I think you've noticed a statistical anomaly. Trading ranges, at least in NASDAQ stocks, are the aegis of the market-makers, who are the people all buys and sells are made from/to. They make some of their money, like bookies, from the difference between the bid/ask, and therefore, they typically tighten ranges when order flow is good. It doesn't pay for them to have a 4% spread between bid/ask if they're selling a large number of shares. When they tighten, it can sometimes be an indication of a move, but it can also just be them trying to summon up sales. Look at the MMs as salesmen, and the b/a spread as one of their tools, and you'll realize that there are many reasons why spreads are set as they are. I don't know if that addresses your other questions about volume. Ivan

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