Mike M, you are a novice trader aren't you?
"To even suggest that a MM could/would step into a collapsing stock (on a day that 2.9M shares are being traded) to stop its descent so they can short a gap opening has to be delusional"
I guess you really don't have a clue as to what MM's are all about. Why would an MM want to prop a stock up... imagine what would happen to CUST if he let it drop to the 30's due to lack of artificial support... that would have been a mortal wound -with the WSJ piece-. Next week, even die hard longs like you would have left this turkey as panic would have ensued... especially with margin call selling. Don't you get it, an MM will do anything to keep a stock from collapsing outright because the MM would suddenly become unemployed. How can you make a market without a viable stock? FAHN did support CUST at critical times throughout Friday (bounce off 40 and especially at the end of the day). By support, I don't mean that FAHN was the only buyer at these points. ie. CUST drops to 40 5/8, FAHN bids 40 3/4 and eats all sells. Traders see that buying is going on and stock is not going through 40, momentume players bid ahead of FAHN to buy the stock. FAHN raises bid to 41 1/2, eats all sells, momentum players see CUST "bouncing" and longs buy in ahaed of FAHN. Don't you see how easy it is for a single MM to "support" a stock -also, it wasn't just FAHN doing this, MASH and others would join in-. You just hold steady at a bid to give Joe Public confidence to go long on the Turkey... you as the MM only have to eat sells at a couple of junctures as Joe Public will regain confidence to go long the stock if it seems to have "support". Most daytraders are stupid and don't have a level 2 screen. When you see a stock have support, people always assume that is due to individuals buyers regining confidence in a stock when in actuality, it is nothing more than an MM propping up the price at a certain level to induce individuals to go long. Regardless... FAHN supported CUST because he didn't want CUST to get mortally broken Friday... FAHN's actions probably gives CUST another week or two before it goes flatline IMO. To see how important FAHN's actions are to the price of CUST, check out a Friday intraday graph of the last 15 minutes or so, you see that rapid 2.5 point dip down, guess what happened? FAHN went off the bid and the stock dropped like a stone. FAHN probably assumed that by that time, daytraders had gained enough confidence in CUST to go long it without his help... WRONG! FAHN quickly went back on the bid and propped up CUST to the close. CUST isn't an investment, it's just a trading toy that MM's want to keep alive as long as possible to milk money off shorts and longs. Even compared to most internet stocks, CUST is extremely volatile... why? because MM's are in control of this stock for the most part... when they offer no support on the bid, it drops like a rock triggering stop losses that MM's pick up for cheap shares, then they bid up the stock again suckering longs to come in again... etc.---g
A lesson on MM Games,,
I meetmembers,, ondaily basis ,, in SA,, with so many talents ,, I am flattered as hell,,
<n2growth> All the bids begin to fade
<Dewave> thoughts on extended hours an 24/7
<n2growth> You smack a few top make them think you r a real seller
<n2growth> Then GSCO joins your offer
<n2growth> Then you offer on Select NEt
<n2growth> When it starts to crater and the sell orders are rushing in, you begin to nibble at them to cover your short
<JDM> So you put in bids 1/4 point below to fake mm's into joining the party?
<n2growth> When the sells start to slow, you buy agressively to get flat and If you like the market or you have a buy order in hand from a fund, you get reloaded on the long side very heavy
<n2growth> Buy orders start to come back because they think the low is in
<n2growth> You don't let them have any stock
<Dewave> sometimes lots of fakes and wacking the ask
<n2growth> You lift the offer
<n2growth> they begin to chase
<JDM> So you place and lift...place and lift
<n2growth> You buy a few of the small oddlot Mm to take the offers out
<n2growth> Then you bid size, 25k, 0k on INCA
<n2growth> Everyone says, "PWJ BIG BUYER OF MSFT"
<JDM> then you lift it
<n2growth> As they come for the stock now you let them have it again
<n2growth> I was MM for 5 years
<n2growth> They do this all day
<n2growth> They don't give a xxxx where the stock is goin long term or what the fundamentals are
<stockman> simple rule then is never chase a stock!
<n2growth> It's all about order flow
<n2growth> YES STOCK MAN
<n2growth> NEVER
<n2growth> NEVER
<n2growth> Let it run and buy the pullback
<n2growth> don't be afraid of the pullback in strong uptrending stocks
<n2growth> this is where the funds and the MM's are trying to buy
<Dewave> roflmao
<JDM> n2....when LPHL was going up, I saw NITE placing 5000 shares on the ask side at nearly every tick. Is it that they have so much stock to liquidate?
<n2growth> Then the MM sell the run to the new days hig and get smalll short
<n2growth> JD
<n2growth> sometimes they have a scale up seller
<JDM> meaning
<Dewave> the more I know the more I stay flat
<n2growth> A fund would come to me and say I have 50 to sell inline
<stockman> big client you mean?
<n2growth> That means they want to sell 50,000 shares about where the market is
<stockman> hence the pumping of the stock
<n2growth> So I would fill them on 10 and say working the balance
<n2growth> So now I'm short 10
<JDM> so every tick...you're placing 50's
<n2growth> Then I would actually go bid the stock up
<Dewave> explain wacking the ask for all
<Dewave> or d=bid
<Dewave> bid
<JDM> In what timeframe?
<stockman> good question JDM
<JDM> same day....a week?
<stockman> no
<n2growth> Then I would scale up sell until my customers orders was filled and then I would agressively sell shart to avg my lower shrt position
<JDM> because I see the bid side starting to come now
<n2growth> Then I would make the stock weak and cover on the pullback for a 1/16 or an1/8 profit on the total
<JDM> 2-3 weeks later
<Dewave> lol
<Dewave> minutes
<n2growth> seconds
<Dewave> rofl
<JDM> but the stock doesn't move that fast
<Dewave> BS
<n2growth> Want to bet
<JDM> and I'm seeing the same mm's on both sides
<Dewave> level 3
<Dewave> all deep
<n2growth> You would not believe how differently you would aproach your trading if you sat with the WHEEL in CSCO for 1 DAY!
<stockman> So how can you tell the differece if a stock is beingh manipulated as such or if it is legitamely moving in that direction??
<n2growth> It's not manipulation
<JDM> Wonder what's the percentage of shares that are bought and sold by the same guy is?
<n2growth> When there is buying they let it run it's course and then get short
<stockman> You are right it's art.
<n2growth> If they can help it along buy showing a few bids along the way they will
<JDM> Only makes the other way more lucrative
<Dewave> N2 what MM are you?
<n2growth> You have to sell rallies and buy the breaks in the trend of the stock time frame you are trading!!
<Dewave> lol
<n2growth> Retired a feew years ago
<Dewave> N2 u have l3
<JDM> Sounds like you're unretiring
<Dewave> ex mm
<n2growth> This daytrading opportunity pulled me back in
<sockeye> n2 you need to write a book
<Dewave> rofl
<Dewave> smell it
<n2growth> Yeah I've been told that
<n2growth> No time
<Dewave> ur kewl
<sockeye> I'd buy it
<n2growth> thx
<JDM> See....this is why I joined SA-- discussions like these wil make us all better traders---THANKS N2
<Dewave> no one would understand it lol
<stockman> N2 what other important things we must all remember as daytraders. Give us more rules.
<n2growth> My last few years in the business was my own Investment Banking firm
<n2growth> mergers
<n2growth> acqusitions
<n2growth> IPO
<stockman> (Not for nothing, but this guy is loaded)
<n2growth> private financing etc
<sockeye> anyone know how to log this so I can read it later?
<n2growth> I would sit in my guest house trading all day in my underwear and smoke cigars
<n2growth> my wife wanted to get rid of me
<JDM> Did she succeed?
<Dewave> l2 compared to l3 are we at a vast disadvantage?
<n2growth> Yeah, LOL
<JDM> lol
<n2growth> No Dewave
<stockman> Geez after SWS all I have left are my underwears.
<Dewave> N@ answer
<Dewave> ty
<n2growth> The only disadvantage is the learning curve
<Dewave> whew sacred
<Dewave> tytytytytytyytytyty
<JDM> Thanks again n2--- very informative-- wish the room had
300 people in it
<n2growth> I think SWS looks great here
<Dewave> u guys don't no how much
<stockman> Do you see it going less?
<JDM> Timing is right for SWS
<n2growth> I like the way it acted on the close
<JDM> NITE earnings in 3 weeks...going to be monsterous
<stockman> What did you like about it n2?
<n2growth> Decent bullish divergences on the 60 min chart
<n2growth> Looks sold out to me
<n2growth> I bot 52 to 53 1/4 today
<JDM> I own it way too high
<stockman> When you say divergences, what are you looking for?
<azbear> looking at chart now ... BOP went yellow today (from red)
<JDM> Hopefully I will get out whole
<n2growth> Stockman Do you have any technical studies
<stockman> I do
<stockman> but I am still learning
<n2growth> RSI STOCH"S MACD
<azbear> sitting on 50 dma
<stockman> k
<stockman> I know those
<n2growth> Do you have them, not know them
<stockman> Yes I have them
<n2growth> k
<Dewave> gotta go thanx N2 for ?'s
<n2growth> Can you look at them with me now
<n2growth> see ya d
<stockman> Yes!
<Dewave> been around but u alwys amaze me
<n2growth> How long does your 60 min chart go back for
<Dewave> nite and gl
<stockman> looking at 60 minute chart
<n2growth> How far back
<stockman> middle of april
<n2growth> Good
<stockman> k
<n2growth> Can you put up a RSI
<stockman> yes
<n2growth> 14 bar
<stockman> k
<stockman> RSI about 30
<n2growth> Well lets look at it
<stockman> k
<n2growth> Do you see the low on the 2nd two days ago
<Dewave> had to come to hear this
<stockman> yes
<n2growth> RSI was 18
<stockman> 52 1/4
<n2growth> yup
<stockman> I see that
<Dewave> n2
<stockman> I am getting areading of 22 or so
<n2growth> Today stock hit 52 new low right
<stockman> correct
<JDM> I'm off to bed....n2-- thanks again...I had the best day of knowledge today-- very helpful
<n2growth> Your 22 RSi because of the different settings but stay with me
<stockman> good nite JDM
<stockman> k
<n2growth> Now my RSI is 35
<n2growth> So if you printed that chart and drew a line under the price of the stocks lows and a line under the RSI lows
<n2growth> You wouls see a downtrending stock and A up trending RSI
<jrb> is everyone in here holding nite until earnings>
<stockman> yes
<n2growth> This is a bullish divergence
<Dewave> buy sign right
<n2growth> Lower price but higher relative strength
<stockman> k
<Dewave> love rsi
<n2growth> That's one signal
<stockman> continue
<n2growth> Now lets look at the macd or the stochs, which do
you have?
<stockman> both
<Dewave> stoch here
<pjd777> which stock are you talking about?
<n2growth> k
<n2growth> stochs first
<stockman> SWS pj
<pjd777> k
<Dewave> with ya sws
<n2growth> Where was the stoch on the 3/2 low when the stock hit 52 1/4
<stockman> 9.92
<n2growth> k
<n2growth> mine was 8.4
<stockman> k
<n2growth> now where is it
<Dewave> 10.2
<n2growth> right
<stockman> 11
<n2growth> You should see again, a lower price in the stock but HIGHER stoch readings
<n2growth> Another bullish div
<stockman> k
<n2growth> Now the MACD
<stockman> MACD chart up
<Dewave> lol ty
<Dewave> kewl
<n2growth> Do it yourself this time and tell me what you see
<Dewave> never can learn enuff
<Dewave> kudos N2
<stockman> for the 52 1/4 - -0/78
<n2growth> k
<Dewave> most are missing this
<n2growth> now
<stockman> for 52 - 0
<n2growth> A higher negative right
<stockman> yeah flat 0
<n2growth> So
<n2growth> Downtrending stock price and Up TRENDING MACD right
<stockman> correct
<n2growth> Another divergence
<n2growth> You getting it?
<stockman> Yeah
<stockman> loving it to
<Dewave> ditto
<n2growth> Hourlys and Dailys are the most important because that's what the big hedge funds and the mutual funds watch
<stockman> So how effective does this strategy work overall?
<n2growth> So there was three short term reasons SWS looks like a possible low to me
<Dewave> very well
<n2growth> These are TOOLS
<n2growth> there is no golden arrow
<stockman> k
<n2growth> You are trying to reduce your rick of entry
<stockman> k
<Dewave> stochs works to well and confirmed by MACD
<Dewave> i'm there
<n2growth> When you have 2 3 or 4 of your tools that say buy, you just buy it and manage the amount of risk you are willing to accept now that the odds are in your favor
<Dewave> n2
<Dewave> can ya ex-plain wacking the ask
<stockman> Now you mentioned the closing...
<n2growth> Sometimes you will get a brief wash and rinse at the low or the higs just to make sure as few as possible are along for the ride when the turn happens
<n2growth> I said smaking the bid or taking the offer
<n2growth> Stockman...I paid 25,000 to learn to use these divergences....Learn them and make them part of you brain!
<stockman> Thank you
<stockman> I very much appreciate you spending this time with me
<Dewave> ty N2
<n2growth> We just went through a low setting example. Exactly the same thing in reverse for picking the top
<stockman> k
<pjd777> yes, thanks n2growth
<n2growth> Top would be a stock making subsequent new higs on lower tops in the studies
<n2growth> Get it?
<n2growth> Bearish Divergence
<stockman> I am trying to read the indication that could have warned me about SWS downfall
<n2growth> Look at the daily RSI
<stockman> l
<stockman> k
<n2growth> My RSI was in the mid 80's at the April high and the low 70's at the May high
<n2growth> Caution FLAG
<Dewave> AOL was the exception... correct
<stockman> k
<n2growth> These divergences don't mean that a stock can't go lower on bullish divergences, sometimes they do, but it means you should no longer be short. The rish reward is not in your favor
*** Johnboy (John.Herri@1Cust62.tnt5.atl2.da.uu.net) has joined #Societe_Anonyme
<Dewave> ty
<stockman> gotcha
<n2growth> No d
<Dewave> explain
<n2growth> RSI on AOL was 88 in Mar when the stock hit 130.5 and it was at 85 when the stock hit 175 in Apr
<n2growth> RSI Should have been much higher to CONFIRM THE HIGH
<Dewave> k
<n2growth> Stock went 45 points and the RSI couldn't make anew high
<n2growth> see?
<stockman> That would signify a bearish divergence
<n2growth> yes
<Dewave> ty I c now
<Dewave> tytyty
<n2growth> Volume and momentum was drying up as the stock accelerated. usually a sign of shrt cover buyin not real buying
<n2growth> Allright guys, I hope this helped
<n2growth> Gotta go
<stockman> It did n2
<Dewave> saw the volume
<stockman> appreciate the spread of knowledde.
<n2growth> Stay with it you guys
<Johnboy> foo?
<stockman> I will
<Dewave> argh I know that feel stupid
<n2growth> Manage your losses to come back and fight another fight
<n2growth> See ya
<stockman> later
<Dewave> k thanx
<pjd777> this is a long learning process
<stockman> Exciting though
<n2growth> Best profession in the world
<Dewave> the more i learn the more i don't want to kmow
<n2growth> lol
<n2growth> Then put it in a mutual fund
<n2growth> This is war
<Dewave> no way
<stockman> lol
<n2growth> nite
<stockman> I love war
<pjd777> nite
<stockman> nite
<Dewave> the more i don't trust the market
<pjd777> this is one easy place to lose a life's savings
<n2growth> Market isn't there for us to trust it d
<Qatar> or make one
<stockman> actually , the more I want to learn the market
<n2growth> Learn the tools and use them to your advantage then kick it's ass
<pjd777> yes it is possible
<Dewave> been daytrding for 3 years and happy... but hate the market
<pjd777> not just yet for me though
<n2growth> I live breathe eat love the market!
<Dewave> always learning
<stockman> and unlearning |
