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

To: marketbrief.com who wrote (4091)	9/16/1999 6:45:00 PM
From: Rick Faurot	Read Replies (2) \| Respond to of 18137

I'll take the bait and disagree. Increasing size and quantity of bidders indicates a strengthening stock that is more likely to go up; increasing size and quantity of sellers indicates a greater likelihood of a decline in price. This is only a very general rule and a stock can change directions incredibly fast and wipe out a huge bid and go south for a variety of reasons: selling in the markets, bad news on the stock, etc. Stock action in the short term is regularly manipulated by dealers who display large size on the offer or bid. When this is done on the bid it is known as "juicing." Typically an INCA bid of 10k or more will appear on the inside bid or a tick below. It can be up to a 50k size at times. This may be a legitimate bid but more often it is put up to force a stock to run. This may be because the action is slow and the dealers want some action, or someone may have a bigger purpose in mind. Regardless, the juicing will normally cause a distinct upward pressure in the stock and often the stock will start to move up promptly. If the juicer is serious, he will up his bid as the stock upticks and chase it up the ladder. GSCO often does this and has the power to make it work most times. The same action works just as well in reverse. When GSCO or whoever the player is has the stock run up to the max, they will often flip to the sell and show up a big size there, running the stock right back down. TA traders who want to avoid this "noise" look at fifteen minute charts and ignore the L2. Daytraders don't! Rick

To: marketbrief.com who wrote (4091)	9/19/1999 2:37:00 AM
From: Bilow	Read Replies (2) \| Respond to of 18137

Hi marketbrief.com; Re level-2 bids disappearing as a bullish indication, same with asks going away... I, too, have seen effect many times. In addition, I have caused it many times, too. :) What you are seeing is daytraders trying to make the spread, and then pulling their order after they decide to give up the spread. Maybe an example would suffice. I think MSFT is safe to own. This means that I don't think it will go down, though it might not go up. So I try to make the spread. I put a bid for the stock at the bid. Later, the futures shoot up, and I become more bullish on MSFT. So I buy shares at the ask, and pull my bid. The overall effect is that a sudden cancellation of ISLD bids may indicate an upward move... Notice that I said "flight." The key is that the bids are disappearing without being filled (i.e., they are being pulled). If the bids are going away because they are being filled, then this is obviously a bearish indication. If the futures just dropped quickly, this could also cause daytraders to pull their bids, and either lower them, or change their buys into sells. But when this happens, there will usually be a few daytraders that will leave their bids out, and will consequently buy the stock. This could happen for any of several reasons. If they were scalping short and are exiting positions, they are likely to be happy to take their profit rather than try to make another 1/16th. It is also possible that a daytrader was too slow, and that another guy with faster fingers gave him the shares. Or it could be a guy running a lot of positions, or maybe looking at a different time scale. In any case, when bids are being taken out by being filled, this is a bearish indication. -- Carl