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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: bede who wrote (43398)	5/19/1998 5:04:00 PM
From: T.R.	Respond to of 176387

Pity is right. Not only did DELL have a great report but the Fed is not touching interest rates. Go figure. I hate to think if they would've missed by a few cents. IMHO...a number of investors were waiting for today to take advantage of a near-term top. Tomorrow will probably be more of the same..but within a day or two everything should settle and Dell will be back to business as usual. T.R. P.S. I'm on this baby for the lonngggggg haul!

To: bede who wrote (43398)	5/19/1998 5:05:00 PM
From: Pices	Read Replies (1) \| Respond to of 176387

After hours trading numbers are a scam. Read the following from a previously written article by Cramer. Tactics and Strategies: Cramer Explains Short Sellers' Shenanigans By James J. Cramer Did you ever wonder how stocks that close up "look down" in pre-market trading? Does this paradox bother you? Maybe you should stop to think about the shenanigans that go on before the market opens, shenanigans meant deliberately to depress stocks with the hopes of creating a selling panic. That's what this piece is all about. Take yesterday's trading in Cisco. The company reports a perfect number, a penny better than estimates. The conference call goes well. Asia's bad, of course. But the book-to-bill is plus one, Wall Street short-hand for "the orders are robust." Analysts all reiterate their buys. Some people have to bump their estimates up; others keep their numbers the same. The papers all read super, too. The tone of everybody involved is positive, if not loving -- including yours truly. And the stock is quoted down in Instinet in pre-market trading. Big down! Beginning around 7:00 a.m. Wednesday morning the Instinet market -- an electronic trader-to-trader market -- showed Cisco down as much as $1 from the close. In other words, you could buy Cisco at $62.5 "through the machine." The fact that it was trading down a dollar already in the face of good news left many people who come in that early flummoxed. But not the press. Reporters don't care if it is 1,000 shares of Cisco for sale or 100,000. They don't differentiate. All they need to know is that the stock is "trading down in pre-market trading." They leaped on this artificial cumulus cloud in an otherwise sunny day. Television talking heads, one after another, took time out to point to the decline in Cisco's shares despite the pristine quarter. Some even speculated that it might be a tough day for all stocks because of Cisco's early morning slide. All from a couple of thousand shares of stock offered down! That's because a position as small as 3000 or 4000 shares offered below the last sale can create a powerful incentive to panic for many traders who don't know the ways of the shorts. Not me. I knew those sellers were Wrong. I have seen this game played so many times, the game where the shorts try to hose the longs by offering Cisco to make it appear to be as heavy as possible before the opening. They offer it out loud. They offer it pathetically. They offer it solely with the hopes of catching a CNBC on-camera reporter off guard so that the reporter might be suckered into digging up something negative about Cisco. That way the short-seller can bring in his shares that he sold short at a lower price than an honest market would let him. The profit is just much bigger. As I know many of you are probably in utter disbelief that this stuff occurs, let me walk you through the schematic of a market manipulation by the bears. Let's say the last sale for Cisco is at $63.5. You go into "the box" or Instinet trading - (yes this is institutional stuff; Instinet is an after-hours computerized trading system through Reuters) -- and you offer 1500 shares at $62.5. For most Cisco players that's jarring in itself. "I thought that was a good quarter," must go through hundreds of traders' minds when they see that offering. Remember, that offering is a point below the last price of the previous day at a time when people are expecting the stock to open higher. But that's just part of the game. Usually, some neophyte who does not know how rough the short game is played, then takes those 1500 shares at $62.5. The short seller is an expert angler. He then lays out another 2000 shares of bait, at $62.5 -- the same price. That spooks the neophyte a bit, but he's new at this fishing game, and he bites again. He takes the stock. The buyer figures the seller is just "off his market" and doesn't know he could get a better price if he just held out. The buyer thinks the seller is a moron. Now, the short-seller reels in the rookie buyer with a brazen act of mischief. As soon as the fish bites, the short-seller comes back and offers 2000 shares of the stock at $62.25!! A quarter of a point below the ^#^%#%$# last price paid. Holy cow, something must really be wrong! Unless you are a wily trader, you would positively want to puke up your 3500 shares as soon as you saw that lower offering. That's because anyone who doesn't know the tricks of the trade would have to presume that maybe Cisco is worse than anybody thought. Why else would a seller sell a stock BELOW where a buyer just paid? The faked-out buyer loses all of his confidence. He begins to think, hmmm, there must be a downgrade coming, or a problem with the quarter that only this aggressive seller knows. It doesn't hurt to have a reporter commenting negatively about the stock price in the background. The neophyte then rushes to boot out his 4000 shares of stock before the seller offers the shares even lower. Bids evaporate and the stock begins to sink like a stone. In the meantime, the reporters get tipped off about the new negative Cisco activity, Cisco being the focus name for everybody on Wednesday, and start to gin up their negative theses to go along with the pre-market selling. Soon, the reporters issue worrisome bulletins and those 4000 shares sold short beget an avalanche as hundreds of others, watching this declining story unfolding on their machines -- the trading is visible to all with Instinet -- rush to beat out still more, bigger sellers that might be lurking. Cisco becomes a down stock and the shorts use their chicanery to bring in their short-sales at much better prices than thought imaginable. That's where guys like me come in. I knew Cisco's quarter was a good one. I know the tricks of the shorts. I have puked out that phony 4000 shares more times than I care to admit. But not this time. This time I just stood there. I bought all that the shorts could sell me. And then some. I bought at $62.75. And $62.5. And $62.25, each time carefully monitoring how the sellers would seek to sell stock below where I would pay. And then I bought some more at $62. And then I paid up at $62.25. Two can play this game. And I paid up at $62.5, as the sellers grew nervous that the buyers weren't biting on this selling-induced panic. Because I know the game. Because I hate the game. Because I can make big money betting against these silly tricks of the trade that have no place in the market. Sure enough, I amass a 25,000 share position with a $62.25 basis, or cost, in pre-market trading. And when all the shenanigans are done where does the stock open up? At $63.5, because that's where the real, uncorrupt market was. That was the unmanipulated market. All of that pre-market trading bore no resemblance to the real market, which was much higher than where I purchased all of that stock. It's nice to start the day with a gain. It is even nicer when it is done on the backs of short-sellers who should know that some fish know bait from the real thing. Of course, without the chain reaction of panic the short-sellers weren't able to bring their shorts in as they would have usually expected to. No wonder Cisco shot off like a rocket for the rest of the day. I am not Marshall Dillon. Nor am I Robin Hood. I'm just a jaded sonofabitch trader who can spot when a con gets tired. I'm sure the bad guys are cooking up new ways to trick me as I write this. Let's hope I am as ready as I was yesterday.