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Strategies & Market Trends : Playing the QQQQ with Terry and friends. -- Ignore unavailable to you. Want to Upgrade?

To: Slagle who wrote (444)	5/26/2005 11:09:52 AM
From: Kevin	Read Replies (2) \| Respond to of 4814

Slagle- I would agree with your opinion that the "big guys" can step in and influence the direction of a stock (especially small and mid caps) in the short term, with their large block buying/selling, however this is not a stock...this is an ETF. It is directly pegged to the NDX (NASDAQ 100 Index) and the ETF is quoted at approximately 1/40th of the cash index. Not sure if you are familiar with how the NDX is calculated, but this is a modified capitalization weighted index of the 100 largest NASDAQ stocks. With that said, it is extremely difficult, if not impossible, to manipulate an ETF that has such a large market cap. Mathematically, you would need the "big boys" to simultaneously buy or sell 10s of millions of shares of the top 15-20 companies in the NDX in order to accomplish what you are suggesting (which in turn would cost billions of dollars). The only time I've seen such 'coordination' is when there is a change in constituents of the cash index. That's when institutional investors (mutual funds are great examples) who manage portfolios that mimic the index will sell the stock leaving the index and buy the stock being introduced to the index. But even then, the market effect is really only seen in those specific stocks, and really doesn't budge the overall cash index. The only other time I've seen such an event is during index arb, where the index futures are mis-priced compared to the cash index. But with this, the "big boys" aren't looking to make a stock "go any way they want", rather they are taking advantage of a short-term anomoly in the market place. -K

To: Slagle who wrote (444)	5/31/2005 9:11:30 AM
From: Walkingshadow	Read Replies (1) \| Respond to of 4814

Hi Slagle, <<My opinion is that when the big guys really want too they can step in and make a stock go any way they want.>> Yes and no. Yes, the big guys move markets, no question. But no, they cannot move them at will, because there are opposing big guys in most cases that partially or maybe completely oppose them. Or may overwhelm them even, and push the market the other way and force them underwater. The markets surge in one direction or another depending upon the relative magnitude of these opposing forces. Sometimes they line up on the same team so you get very strong movements. Most times, they are distributed somewhat. Either way, TA in my view represents the summed total (net) of their activities. So I don't see this as making TA less accurate. That said, sometimes the cues are not in the momentum indicators at all, but are elsewhere (market internals, sentiment indicators, volume patterns, etc.). A good example of this was the recent reversal in QQQQ and the $COMPX, which was mostly reflected in volume patterns and support levels, but much less so in the momentum indicators (although the weekly chart was a strong tip-off). <<This may not happen often, but when it does the little guy better get out of the way. >> Better yet, draft on their movements. Then it comes down to the $64,000 question, which I think is the central issue of this thread: where, on balance, are the big guys going with their megabucks? Long, short, or sidelines? Rotating elsewhere? When elephants move, mice get trampled! <ggg> T