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Strategies & Market Trends : Trading For A Living -- Ignore unavailable to you. Want to Upgrade?

To: Ken Adams who wrote (989)	7/20/1998 3:47:00 PM
From: DADDY WARBUCKS	Read Replies (1) \| Respond to of 1729

Ken. Even though it is really bullish according to the size of the current orders. The stock showing 5200x300 at THESE prices. What is showing for offer at 17 1/2? Will it be 5200x8000 once the last 300 get bought at 17 7/16? That is the benefit of trading on Nasdaq and using Level II quotes. You can see all the MM's bids and offers at all levels and their sizes. Eventually you will see all markets go to best bid/best offer systems, and SOES will be history. Daytrading won't be history but it will not be so easy to scalp from the MM's with their big spreads. Hope I'm not confusing you. Chuck Schwab was not totally wrong, but keep in mind they are always going to give you an unbiased answer. No opinions at all from them. Good luck and happy trading. DADDY

To: Ken Adams who wrote (989)	7/20/1998 5:58:00 PM
From: Eric P	Read Replies (2) \| Respond to of 1729

Ken: I'll toss in my two cents. Assume the price is at 17 7/16 bid and 17 1/2 offered, with sizes of 520 and 3, respectively. This indicates that there are orders on the book to buy 52,000 shares at the bid, and sell only 300 shares at the ask. Recognize that this is a STATIC picture of the current limit orders on the specialists book. What moves markets are eager buyers and eager sellers who are willing to give up the spread and place market orders to buy at the ask or sell at the bid. Once a market order for 300+ shares takes out the last order on the ask, the ask price will drop to the next level of perhaps 17 9/16 or 17 5/8. This will open up the likelihood of a new bidder coming in to raise the bidprice to 17 1/2, and so forth as the price of the stock rises. I think the key to market movement/direction is not just the static orders on the book, but more importantly, the sentiment of the new market order and limit orders which come into the marketplace. The way to detect this is to be watching the CHANGE in the sizes of the bid and ask. For example, assume you check back 10 minutes later to find that the bid size dropped from 52,000 to 18,000 and the ask size increased from 300 to 8,000 => you could infer that market momentum is shifting in a bearish direction, despite the fact that the bid size is still larger than the ask size. Good Luck, -Eric