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Strategies & Market Trends : Take the Money and Run -- Ignore unavailable to you. Want to Upgrade?

To: MulhollandDrive who wrote (1677)	6/4/2002 12:02:22 PM
From: GraceZ	Read Replies (1) \| Respond to of 17639

They could have learned to mask selling. In fact there is an automated system that moves small blocks by spreading 100 share orders simultaneously around. Price is moved far more by large numbers of small orders than it is by blocks (unless of course you have large numbers of blocks). The hedgies could have figured out that you can manipulate the price down by selling a big flurry of 100 share orders and then cover in one big block. The buying below tends to work price lower, as it did when the public was buying the declines back in 2000. You have no idea just how dangerous it is to engage in these kinds of automated schemes. They work out problems in the short run with little regard for the long term consequences. It was machines that amplified the 1987 debacle. The institutions and large players tend to accumulate small in thinly traded issues and then sell all at once. While the institutions could be selling in small orders, you still have them net out which shows that the public stopped buying on the way down some time ago. While big guys can buy and sell small, very few little guys buy in huge blocks until you get down to the former high flyers that are now pennies. For a while I thought it was just small guys selling their individual issues and buying mutual funds but the inflows have been mixed. Besides the mutual funds are hiding in the NYSE as evident by the money flow there, hiding in safe and there have been some terrific performers on the NYSE in the last year, you just had to buy what wasn't in a big index. The reason the market makers and members are getting long against their will is because it is the accumulated buying they've been forced to do. This kind of situation has always resolved itself higher, they don't hold bags very well. 6000 hedge funds will find out shortly how dangerous it is to try to turn these guys into ATM machines. One has to assume they'll all panic at once. That's when they find out all the supply is at much higher prices.