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To: Arthur Tang who wrote (752)	4/1/1998 4:47:00 AM
From: Arthur Tang	Read Replies (1) \| Respond to of 1471

Why understanding market making in investment is more important than technical analysis? Because technical analysis is plotting the results of price changes in market making. Technical analysis is to predict the market which is controlled by a market maker. Many market makers exist to create and maintain their own customers' market. But only one largest market maker can move prices. When market makers jostle for business, they move prices up or down to take more business or avoid more business. However, it is rather limited by their own customer base. Most brokerages tend to keep their customers' money in house. Brokerages' business is bridged by the specialist on NYSE which only does 11% of the total NYSE business. The rest 89% is done inside of each brokerage houses. In Nasdaq, the market makers are registered to trade with each other; but they could be non-registered to trade in house only, the advantage is to avoid doing business with registered market makers..