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Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?

To: steve goldman who wrote (3398)	7/21/1998 2:11:00 AM
From: Roger Thrash	Respond to of 4969

I've noticed today what may be the first repercussions of the new size rule. HRZG,MHMY, ERNS and maybe more have gone to size of "1" in stocks where it used to be 1000 or 500. Little dog stocks but still. This suggests they will begin scrutinizing each and every trade rather than letting the autoexecute fill us. This doesnt look good from my perspective as the old days of instant 2000 share fills seem to be long gone. It appears the only way to get a fill will be if there are a couple of other mm's on the same side you are hitting and in that case it's probably not the best time. I think the rule is going to have the opposite effect as it was intended with shamsters like HRZG playing 100 share bidding games. NASDAQ needs to change it such that if a mm is only bidding for 100 then he can only get 100. That way it would make them show their hand a little bit. As long as the NASDAQ is self-regulated we cant expect it to get better. Comments ?

To: steve goldman who wrote (3398)	7/21/1998 11:59:00 AM
From: trouthead	Read Replies (1) \| Respond to of 4969

Hi Steve, Been watching EGGS lately and am trying to understand some of the posts regarding MM motives. Could you read the following and tell me if this guy is in left field or are the MM's acually doing some of these things? ***From the EGGS thread***** To: +LGregg (1855 ) From: +Rommy B. (Trial Member) Tuesday, Jul 21 1998 12:18AM ET Reply # of 1892 If the MMs wanted to take the stock for another ride up, today would've been the perfect opportunity. But they did not. Instead they kept it stable. If the MMs were planing on another run-up, they would have driven EGGS lower than 19 so they can milk the share holders for all they can. Keeping the stock at the 20-22 for the past few days so people can accumulate shares and then running the stock up only hurts the MMs because then too many people bought the stock for a low price and sold for a higher one (read, MMs lose). Also, if MMs run the stock up now, too many will bail out at 25 because that is very close to the climax of the last run. MMs are waiting for impatient shorts to cover AND for longs to accumulate (things seem to be pretty steady, after all, with even some little moves upwards). That's why some of us had a hard time re-shorting the stock today. Once the impatient shorts have left and the longs get comfortable again, then the MMs can take it down to a new level. The MMs are trying to shake loose the shorts that are riding their backs and invite the longs to accumulate (still at pretty high levels when you remember that this stock was at 9 earlier this month...). To top it all off, this creates confusion for both longs and shorts. A win-win situation for the MMs. I'm not too concerned with predicting the intra-day movements, but IMHO I do predict that EGGS will go below 20 and then break 19 sometime this week. If I had to take a guess, though, I would say that EGGS would gap up a little bit in the early morning and then quickly move into the 20's before doing its usual balancing act until it heads south further either later on in the day or soon enough. EGGS is acting like many other stocks whose price was run up: First they drop, then climb back to almost challenge their top level, and then finally drop very close to the original low. This way MMs are able to ride this roller coaster up and down many a time. *****End Message******* From reading this thread and others I have the impression that what Rommy says is going on is not real, but rather a comforting myth to explain inexplicable stock movement. Doesn't the number of buyers and sellers actually determine what the price is? I realize the MM's can move the price, but if they move it too high (too high based on the percieved value of the company)the buyers will disappear and they won't have the chance to get their 1/8 on trades. I think MM's want volume and could care less about what the price is. Thanks for any light that you or others can shed on this. JB