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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Fun-da-Mental#1 who wrote (56541)	7/13/2000 10:56:06 PM
From: Casaubon	Respond to of 99985

I believe it occurs when a stock is over-valued and attracts short sellers. Scarcity of shares drives prices higher from trend followers, which causes shorts to panic cover at a loss, which drives the price higher. When the weak shorts have been cleaned out the price starts to erode from loss of buyers. Longs fearing that they might not get a better price begin to sell and a new trend emerges. The lack of shorts causes a swift move to the downside, until too many recognize the downtrend a wish to short the stock into the ground.