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

To: Apakhabar who wrote (13510)	8/12/2001 4:14:12 PM
From: Dan Duchardt	Respond to of 18137

Specifically, why should "a number of trades going off at the ask [indicate] a lot of buying pressure...."? The key word is pressure. You noted buying at the ask. That's a perception. "Pressure" is what you concluded that buying meant. That is a limited definition of perception. In the broader sense, perception involves both the observation of a thing, and its interpretation, or understanding. My interpretation, whether right or wrong, of a large number of trades being executed at the ask was that many traders wanted to own the stock badly enough to pay the spread, rather than putting out limit orders at the bid hoping to be filled. Of course there was also selling pressure manifest as I described it by the large availability of stock being offered at progressively lower prices. But those sellers had the buyers coming to meet them at their price, not the other way around. The fact that they were willing to sell lower and lower, when it appeared they could have just sat there and sold at higher prices, led me to conclude they were in a hurry to sell a lot of stock, but did not want to create the impression they were willing to sell at whatever price a patient buyer was willing to bid. If you prefer to think of noting the "pressure" as also being a perception, and not a conclusion, that doesn't change the fact that it is a separate perception, i.e. "buying pressure" is not one perception but two. I do not agree, but that goes back to our definitions. Dan