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To: Jason Rooks who wrote (1920)	12/3/1997 11:11:00 AM
From: Jason Rooks	Respond to of 60323

additionally, from another thread is the following discussin of MM. I believe the MM means market maker, but nevertheless, it seems to be a four letter word lately. When I am talking about the MM's accumulating on market orders, these are accounted for as 'sales' rather than 'trades' and do not show up on your quote service. When a MM fills a market order to buy he/she does so at the current ask and sells from his own holdings (or opens a short position) On the flip side, when a MM fills a market order to sell he does so at the current bid and increases his own holdings (or reduces the size of his short position) If the market buy and sell orders do not balance out and the MM does not want to change his position, he can present the excess to the market. Or if he wants to adjust his position to the long or short side he can create an imbalance by presenting more of the buy or of the sell orders to the market. Over the past 3 days the MMs have filled more market sell than buy orders to/from their own holdings (for BNGO). Unless they have been entering a series of unobtrusive trades on the side (I see no evidence of this) this means they have, as a group, been increasing their postion in BNGO. Because these are recorded as sales, most investors would not notice this happening. This would be particularly confusing to TA watchers that are keeping track of indicators such as Money Flow and On Balance Volume. For instance, because the Money Flow equation sees all of the MM purchases, at the bid, as taking place on a 'downtick' (not the usual definition of this term - for money flow it just means a transaction that is lower than the previous transaction - trade or sale) and MM selling as an 'uptick', the Money Flow equation will usually give a negative sum when MMs accumulate. On a market like NYSE or AMEX a negative Money Flow sum would usually be a bearish indicator - but because of the different role that MMs have in the NASDAQ market, if a negative Money Flow sum is the product of MM accumulation, I would interprete it as a bullish indicator. (or at least as an indication that the MMs want the market to move upwards)