To: E. Davies who wrote (20922 ) 4/15/2000 7:27:00 PM From: ahhaha Respond to
At the top of an intermediate advance there are few sellers above. People don't book above near the top because they think it's going higher. They book below in case it happens to back off a little so that they can get in before the next expected advance. The book is thin above with public orders to sell. The MMs believe it's going higher too. Do you think they know anything different than the patzer public? If so, you are wrong because you're not appreciating human nature. Since the MMs see higher, they aren't going to sell to a market order to buy cheaply. They want lots of protection since it is going to the moon. They are forced to sell since the public isn't selling, but they won't sell much before raising the price. Some market orders to buy send price right up in a spike. Doesn't matter what the B/A is. The stock is illiquid above. It's inelastic with respect to marginal demand. There's not enough supply above to keep price from jumping, so the players including you see this spike and say, "No way, Jose. I ain't buyin'". Then a few sell market orders hit and they discover that it's easy to sell. The stock doesn't yield much price concession on sales. If size can get out at a good profit, size starts doing so and the whole process now reverses to the downside. Buying causes price to decline.
