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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: kikidoll who wrote (3700)	9/8/1999 7:17:00 AM
From: OZ	Respond to of 18137

One of the reasons for the activity of the last hour is that this is when the big boys show their hand. Institutional orders get the last parts of their orders filled, market makers play in their true direction, etc. It is a time of reckoning. It is the period of the day controlled by the professional. The mornings are inversely amateur driven. regards, OZ

To: kikidoll who wrote (3700)	9/8/1999 8:16:00 AM
From: TraderAlan	Respond to of 18137

kiki, Adding to Oz's comments: after a morning run, it's often a lot easier to slowly test the boundaries by swinging the stock back and forth than it is to break it out again. The reason is volume. The first and last hours can comprise 50-60% of the total volume for the day. So if it isn't a strong trending day (and there are only 3-4 of these per month) there's less MM profit in ramping a stock to a new high. Better to wait for the 3pm crowd to "grease" the rally or even provide the pain for a selloff. Some interesting notes regarding Oz's comment. Much of the institutional action occurs right near the end of the day, in the last 15-20 minutes. MFs often have systems that demand buys and sells based on the close or they need to reallocate one group against the other based on daily strength/weakness. There also is the phenomenon of the close of the buyback period at 3:40p. (Last I heard, perhaps rules have changed) companies cannot defend their stock using preannounced buybacks after this period. This generates some strange strategies to force selloffs. It also creates conditions for short squeezes that have the opposite effect. There are also well-known buying and sell tendencies near the end of the day. The 2:30p "sell" anticipates the last 1/2 hour for bond trading. There is a buy bias at 3p and another sell bias at 3:30p. Alan