TAPE READING (chat room cont.)

[eusdaiki]

Quote from Maverick74:

I never look at time and sales during the day, only the quote. Open book is garbage, don't look at it

Ok, now you've really got me confused... I though when you said talked about the tape you where talking about the time and sales and that you where looking at buys and stuff at the TAS...
So please help me get my vocabulary straight. What do you mean by quote what do you mean by tape?

 

[dodger fan]

the quote window gives bid ask quantities and prices along with changes for a specific symbol and is updated whenever there is a change. time and sales gives the same thing but also gives the historical data. if you have esignal, quote windows and time and sales are separate objects.

 

[yip1997]

Quote from eusdaiki:

Ok, now you've really got me confused... I though when you said talked about the tape you where talking about the time and sales and that you where looking at buys and stuff at the TAS...
So please help me get my vocabulary straight. What do you mean by quote what do you mean by tape?

I am confused too. I thought print + quote = tape.

 

[Maverick74]

Quote from eusdaiki:

Ok, now you've really got me confused... I though when you said talked about the tape you where talking about the time and sales and that you where looking at buys and stuff at the TAS...
So please help me get my vocabulary straight. What do you mean by quote what do you mean by tape?

The tape is the prints. When a stock price prints, that is the tape. In the old days of Livermore, there use to be a ticker tape. And the last price would print out on the tape. That is what you are looking at. Livermore would simply read the last price in those days. No bids or offers or time and sales.

The time and sales is a separate window. You should never have your time and sales window open during the day. How the hell could you watch more then a few stocks. You should be able to watch 10 to 15 stocks at least. There is not enough room to have 15 time and sales windows up. Besides, you will never see the information anyway. All you need to look at is your quote page, the bid,offer, last price, print, that's it.

 

[eusdaiki]

Quote from Maverick74:

The tape is the prints. When a stock price prints, that is the tape. In the old days of Livermore, there use to be a ticker tape. And the last price would print out on the tape. That is what you are looking at. Livermore would simply read the last price in those days. No bids or offers or time and sales.

The time and sales is a separate window. You should never have your time and sales window open during the day. How the hell could you watch more then a few stocks. You should be able to watch 10 to 15 stocks at least. There is not enough room to have 15 time and sales windows up. Besides, you will never see the information anyway. All you need to look at is your quote page, the bid,offer, last price, print, that's it.

Ok, Im starting to follow you now. So the reason I should look at 15 stocks is to look for abnormal movement at one of those stocks, to spot profitable oportunities...

time and sales should be studied after the closing bell then/?

 

[Maverick74]

Quote from eusdaiki:

Ok, Im starting to follow you now. So the reason I should look at 15 stocks is to look for abnormal movement at one of those stocks, to spot profitable oportunities...

time and sales should be studied after the closing bell then/?

Not abnormal movement. You are looking for large buyers and sellers. Your job is to tag along with the buyer and the seller. All 15 stocks you have on your screen should be news related.

Yes, time and sales is to be used after the bell or if you have to leave your desk for a few minutes and you need to see what traded and where.

 

[dodger fan]

Maverick,

Do you usually have postions in most of the 15 or so stocks or is it mostly a small subset of those stocks that you initiates positions?

 

[eusdaiki]

I think that I saw an institutional buyer in action, though he was at a Nasdaq stock not on the NYSE.


Late in july this year, around the 22nd day.
It was at BRCDE. This guy was buying 200 shares every two seconds for several hours. At the office we thought it was some mad guy or something... he would buy 200 shares every 2 seconds regardless of price and always through the brut ecn. We didn't realize he was loading about 720,000 shares per hour.
We where at the stock looking for rebates since it used to move 5-10 cents per day, between 3.90 and 3.96. 3 days later the stock was worth 4.55.

 

[yip1997]

Quote from Maverick74:

Not abnormal movement. You are looking for large buyers and sellers. Your job is to tag along with the buyer and the seller. All 15 stocks you have on your screen should be news related.

Yes, time and sales is to be used after the bell or if you have to leave your desk for a few minutes and you need to see what traded and where.

Let me see if I understand it. If the overall trend for a news stock is up (the stock has been moving up nicely), it means there is buyer. So when you see a double print, it means there are two aggressive buyers, and they might push the stocks higher later in the day. You will buy the stocks at around the price of the prints ( b/c you know they will buy at this price ).

However, if the stock drops below the price, will you cut your loss and close your position? When the stock drops below the price, does it mean that there is one seller bigger than the two buyers? How do you set your stop-loss?

I will set it around 2 cents below the price.

 

[ilganzo]

Quote from yip1997:

Ilganzo:

If you look at my attachment, you will find it hard to tell if they are buyers or sellers (at least to me, I am trying to learn to identify buyers or sellers). The first double print at 34.42 (with 4000 shares each) occurred between bid and ask. Then offer stepped down to 34.42, but Bid stepped up too. The second double print (with 1900 shares) at the ask, and offer stepped down to 34.41 with small prints at 34.41. Then the third double print (with 1000 shares) occurred at 34.42 again. The offer was then lowered back to 34.41. A sale with 400 shares was then hit at the ask (34.40).

DHI just announced earnings yesterday, so I assumed there was institutional buyer or seller.

If you read this thread from the beginning you'll find a detailed description on how to interpret double prints by Maverick. Anyway, by looking at the double prints alone you can't tell if there are floor buyers or sellers. You have to look at the whole picture: first of all, what are the news for this company? Then looking at the chart you can tell this stock has been moving up for at least an hour (BTW, an overlay with the future chart to judge the stock strength wouldn't hurt) . Now by looking at the quotes right before the first double print you can see that the best offer is MSE, not NYSE. What the specialist is saying is this: "I'm not interested in participating in the sale of this stock but I'll buy 200 shares at 34.37". Now see how the NYSE bid steps up to 34.38 after the double print? I call this the strong quote. The strong quote steps up or down more regularly than the weak quote and always in front of the ECNs to absorbe as much stock as possible without showing his hand. The weak quote (in this case the ask) will jump up and down quicker to confuse traders and most often will stay away from the market. So now you have all the numbers in place to buy the stock (possibly inside the spread) and sit down and relax, right? Wrong, I wish it was that easy. The specialist will do everything he can to beat down the stock so that he can buy more stock from weak hands. He will wait, and wait and wait as long as he can: maybe a seller will step in or maybe the market will go through a pullback and he will take advantage of the weakeness to scare off traders. Of course, this is all relative to the overall strength of the stock. If there are tons of buyers on the floor, the specialist will be scared one, not the traders, and he will move his quotes like a charm.