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To: LLCF who wrote (141967)	1/7/2002 11:33:16 AM
From: ahhaha	Read Replies (1) \| Respond to of 436258

I don't think it's particularly useful on it's own. The article says that the best correlation between sustained moves and single event actions is when there are many small trade single actions rather than a flow structure that has fewer actions and more size. I refer to this as "persistence" or "persistence of state". When you make a market and you get the persistence of small orders you don't know whether it's due to a few transactors or many transactors, so you you have to stop supplying at a given price to preserve your powder. When the action has more large trades you tend to hold the line on price and keep your competitive position. Gopikrishnan doesn't attempt this kind of explanation because it exceeds the bounds of the hypothesis. .. it's nice to know it occurs yes. My point to Grace was that you have to be careful assuming that large blocks are meaningless while small orders 'push price'... large blocks can be very meaningful. Let me clarify. Block action is important cumulatively over time since 85% of transaction volume is contained in blocks. Blocks remove or restore the state of stock supply more than small lots, but small lots have greater influence over price at the margin and persistence than do blocks. So the relevance depends on whether one is using this information to help in trading or in investing. Well, then you're not looking for cause... that's fine. The specialist cannot interfere with the book by bidding or offering against or in competition with it. So if paucity of orders increases elasticity and enables a little action to move price, this isn't due to specialist involvement. If anything the specialist provides the contiguity bridge so that if the public wishes to run price, they can do so without dropping into price holes. My point is that you're observation is something any good stock trader has noticed but isn't of much consequence in making real money in the markets... get it? It is of consequence and of value as you can testify by what I've stated above. Agreed for the most part... however I have seen some folks who really found their calling so to speak and who are much better at the game than most. That does not address the point that they use the phenom to their advantage, indeed perhaps help cause it depending on the circumstances. Don't kid yourself and if they think they are taking some advantage, they're kidding themselves. You don't last long with that attitude. Right attitude is to be humble and allow the market to provide through obedience to rules and pursuit of integrity in action. I have no idea... if you don't think a stock moves quickly on no volume for reason then you don't know how it works. It doesn't work in the way you think, via some set up by the specialist. It works via the structure of the public's orders with the specialist merely an incidental participant. Everything you see occurring which the public blames on MM and specialist is only the result of endless machinations provided by the public's attempt to beat the market. .. again, not that I think it matters or that there is any big money to be made except in smaller issues. The only money that is to be made in any size issue is the money that is invested. You have to hold to come out ahead. I said [meant] you have to have the ability to lay off risk in other issues/index etc. This technique started in the mid '80s. I advised various members not to get involved with it. Those who followed my advice didn't get nailed in the '87 crash. What it does over time is fight the natural return that the market provides by getting on the other side of the public action. It does tend to reduce the risk or stability of return at the cost of conceding some return. The problem is that there are bounds on its control. When exogenous events cause price to exceed such bounds the insurance turns into a destructive monster. I'm really referring to any trader trying who might attempt to play the game implied in the article without running a portfolio that is hedged..... ie. every individual trader on these boards, including you and Grace. Hedging is the worst thing you can do. Don't do it. It will only reduce what the world wants to give to you. The point is they are a hell of a lot smarter than YOU and don't even sniff at the anomaly you suggest. This is another one of the myths that you must hold so that you can continue to believe that you can beat the market. Whenever anyone threatens your myths they must be attacked. What I told you is so profoundly true that virtually no one escapes it. Why should they. It's what the math indicates. The only way to win is to be lucky initially and quit while you're ahead. None of those "smart" guys does that, so they get "kicked upstairs". Why do you think they are smarter than me? Or why would you say such a thing?

To: LLCF who wrote (141967)	1/7/2002 2:04:02 PM
From: GraceZ	Read Replies (2) \| Respond to of 436258

I don't think it's particularly useful on it's own... it's nice to know it occurs yes. My point to Grace was that you have to be careful assuming that large blocks are meaningless while small orders 'push price'... large blocks can be very meaningful. See, this is what you do all the time. You read what I write and then you make assumptions as to what I think it means in terms of making money. Why not ask what is the significance of this observation, (that large numbers of small orders push price around and blocks can have little effect on ST price movements)? Never, anywhere, did I write that "blocks are meaningless" nor would I ever say that. My original post had everything to do with the wide spread assumption that if the market is moving up "pricewise" it means that the big guys are the ones pushing it there by buying. You simply can't make that assumption from watching price. You can have either accumulation or distribution on a rising market. I don't know about you, but I don't like to be on the receiving end of distribution. What every trade analysis tells you is what is going on behind price. Nothing tells you what is going to happen, the best you can ever know is what is happening.