A really simple, difficult question

Just a really simple and easy question: do you ask the same question for Ebay ? Is the answer not evident ? It is the rules of Ebay to favor higher and higher prices. In stock market you can have both sides because of short selling rule which permits this.
 
"If you get this picture, then you can begin to amke an algorithm to start making money. you have to get this picture first so you can get past idle speculation. If anyone asks dum questions about this I will use them as an example of how their minds aren't yet in gear."

No dumb questions here....just kudos for a masterful explanation bubba.
 
Interesting commentary, but theoretical to a degree. Let's get more specific if we could. Look at Autonation, symbol AN, for 2/21. This stock is being added to S@P 500 announced on 2/19 but no date given for the addition. It is replacing Rational Software. Funds and institutions started buying on 2/20 altho stock opened high and didn't move much that day. Yesterday, 2/21 stock traded 38million shares, more than 19 times average daily volume and not only did not rise, but showed a loss on the day. How do you explain that? I watched the chart all day and when the market was rallying, the bid/offer didn't budge on AN yet large prints were being posted thruout the day as the funds were getting into the stock. I'm trying to come up with an explanation for this and I couldn't so I'm seeking answers from my fellow traders. By the way I checked short interest and it actually declined for AN. I smell a rat, but maybe I'm missing something.
 
I agree, the theoretical is right on but sometimes the stocks just dont co-operate or better to say its not always instantaneous. Many days I will watch a nyse issue trade thousands of shares in buys the first 2 hours of trading and maybe range 10 to 15 cents. Later in the afternoon, the market is dead and a slow but steady stream of 100 to 500 share buys sends the price up 50 to 60 cents in twenty minutes.

I like to think that even with the buying in the am there was a seller supplying those buyers, so not much price appreciation happens. But in that even though the buying is paultry there is not much supply. Maybe the specialist has just totally run out of inventory. Thats what I " like" to think.


Quote from buff:

Interesting commentary, but theoretical to a degree. Let's get more specific if we could. Look at Autonation, symbol AN, for 2/21. This stock is being added to S@P 500 announced on 2/19 but no date given for the addition. It is replacing Rational
SNIP
from my fellow traders. By the way I checked short interest and it actually declined for AN. I smell a rat, but maybe I'm missing something.
More...
 
These two guys ought to grow up.

they don't have a clue as yet.

who is the source of keeping the price where it is on Buff's dumb recitation?

why can't ron figure out why low volume causes more action than high volume?
 
I have said in another post , I don't remember where, that my model normally takes into account the volume because volume is of course expected to play a role in the law of offer and demand. But numerically when I put the volume at 1 it doesn't change nearly anything on key price levels since it is an order of about 0.1 on Dow Jones so really peanuts !!! I did it in fact by pure chance one day I was fed up with the calculation time which can last hours with volume :D

So I agree with Nobel Prize Maurice Allais when he says that real time allow market makers to control the price. Volume has only a statistical signal significance but doesn't change the fundamentals of price equilibrium levels. It can also shorten a trajectory (not enough volume).


Quote from ron2368:


I like to think that even with the buying in the am there was a seller supplying those buyers, so not much price appreciation happens. But in that even though the buying is paultry there is not much supply. Maybe the specialist has just totally run out of inventory. Thats what I " like" to think.
More...
 
You must log in or register to reply here.
Back
Top