Anyone Care to Explain Today's Rally? :)

Discussion in 'Trading' started by BobbyMurcerFan, Feb 21, 2003.

  1. rs7

    rs7

    This post refers to the old "for every buyer there is a seller" etc. & "one side more aggressive" etc.

    Vlad makes his case. IndexTrader says he "hit the nail on the head".

    HOWEVER: While I agree in essence with what Vlad says (as I usually do...Vlad is one of the true bright lights on ET IMO), I think his explanation is a bit convoluted. Here we have two completely different scenarios.

    First, the unfilled orders. Naturally, the guy with a limit order to sell his $10 stock for $100 is not getting filled. So obviously here we have a seller without a buyer. And this is meaningless.

    In the second, and more pertinent example, Vlad has his 100k shares to sell, and 10 buyers bidding up the stock. The way I read it is that this competitive bidding somehow ends up with the highest bidder getting all the stock. This is not how it works in real life. FOK orders (not serious orders IMO) or AON orders (also, in large size, orders I would not consider serious) are not typical. Maybe I look at an Instinet terminal too much and it has made me too cynical.

    What is described would be a scaling up of the price of the stock as the shares are bought piecemeal. If it is a MOC order, then yes, the specialist will line up his buyers, and if he has enough market orders (or marketable limit orders) they will all end up paying top tick. And if this is the case, you can rest assured that a little frontrunning will occur by the guy in the $3k suit. But take the same trade to the floor during trading hours, and the 10 buyers are getting fills as they are bidding up the stock. At prices that rise incrementally. Also, in real life, Vlad would not likely put his 100K shares out at once (at least not in his personal account:)) Unless he were selling into extraordinary up movement, the likelihood of the 10 buyers bidding UP the stock is far less likely to happen than if he legged out of his long position. (all this on the assumption we are talking about a real listed issue that can be hypothecated. Not some WCOM or NT ....however they trade these days if they trade at all). So while I have to agree with the "not necessarily" answer in principal, in the strictest sense it all really is because of either imbalances, which adjust during market hours, or buyers and sellers that do not have "serious" orders placed. There is ALWAYS a seller for every issue. And there is ALWAYS a buyer for every issue. It is a matter of agreeing on a price. The socks I am wearing are definitely for sale if someone wants them for $100 dollars. And I am always a buyer for a new Porsche at the same $!00. GTC for sure!!!!!

    Peace,
    :)rs7
     
    #31     Feb 22, 2003
  2. .
     
    #32     Feb 22, 2003
  3. Do you know what a parabolic SAR is ? Well let us pretend it is a sort of parabolic SAR but with values that are much more precise :). Or everybody knows that the trend is defined by a serie of highs and lows so you can also consider the points as this serie (that is to say a serie of lowers lows for a downtrend for example see illustration below extracted from my guide).

    As for publishing them before market opens, well it IS published everyday on my site SEVERAL HOURS before market opens towards 7:30 Paris Time or 1:30 New York's Time :D ( More than 200 members know it).

    <IMG SRC="http://www.elitetrader.com/vb/attachment.php?s=&postid=207936">

     
    #33     Feb 22, 2003
  4. As for the rules, well

    <IMG SRC="http://www.elitetrader.com/vb/attachment.php?s=&postid=207940">

    A dual is the counterpart blue point of a green point. The green line is called the projection line (it is the target line) The blue line is called the base line (it is the consolidation line when market enters this phase before resuming its trend on the green line).


    Joke :
    If you want a mnemotechnic for remembering the rule, listen to gandalf in "The Lord of the Rings" from J.R.R Tolkien :

    "One Ring to rule them all, One Ring to find them,
    One Ring to bring them all and in the darkness bind them"

    :) :p :D
     
    #34     Feb 22, 2003
  5. It may be quite simplistic, but I have found the 30 min stochactics to be an infrequent, yet excellent predictor of near trem direction .

    If you get a sto failure when a bar goes outside the Bollinger band - odds are really good that the price will reach the opposite Bollinger band within a few hours.

    Look at the 10:35 down bar this morning (2/21) and see how much higher the sto was on this lower low price, the market proceed to move to the upper band in 90 minutes.

    Sorry but I could not get chart file to attach ??? So you'll need to create a simple chart and take a look.
     
    #35     Feb 22, 2003
  6. Lotus 7

    Lotus 7

    Good Morning all,

    I have been browsing these boards for a while (as a silent observer) and would like to thank all who contribute and post to these boards. this is a great resource and community

    Now Why did the market rally,

    I think we would need to ask why wouldn't the market rally. lets take a moment to think about it.

    We just have come off a 21 day decline and have been oversold add to this that we traded down to the 80% retracment zone on the SPX at the 808.00 area and got a reversal bar signal with a wide range bar "THEY" put a lot of money to work in just two days with a thrust move.

    We got a nice move into the next resistance zone at the 853.00 area this was very strong resistance and most traders knew this so it was natural to have a tuff time to get through this on Tuesday. Now Wednesday and Thursday we saw very light volume "THEY" put a lot of money to work and just walked away So the market drifted down for two days and even with this weakness still held up. this tells us that THEY are not ready to let it go just yet. we had a hard time even getting to a 38%Rt and it took 2 days to get it. not to mention that the internals were very very weak. We should have sold off more than we did on Wed and Thurs along with no VOL this shows you that THEY are not done yet.

    So now we are coming into this morning we are looking for some kind of retracment, the 50% rt is at 829.00 - 830.00 area any noise and news just gave a reason to get to the next level 50% RT plus it was the 1/2 way point between S1 and S2 so this had you on alert to see how we respond at this level. Once you got confirmation with a reversal bar the next target was naturally 853.00 so not such a surprise that we traded up and buyers stepped up to plate the internals were very very strong and even so is was late in the day and not a surprise that we moved lower off the highs. Even so we should have moved even lower into the close so this is viewed as more strength. there are many different trading styles that fit many different personality's some trade with a bias and some without. For me I can only trade what I see.

    where did we stop going up ? Yep you know 853.00 area at 2:30 ish we are still in-between zones and can go anywhere but 870.00 area is not to far away and today's action was viewed as strength

    I hope you have found my sharing entertaining and helpful

    Disclaimer: this is my first time post and you will have to read at your own risk. Take anything I say with a grain of salt and ignore my inability to use proper grammar and spelling you will just have to deal with it because I do.

    Its been fun the late night poster
    :D

    Lotus 7
     
    #36     Feb 22, 2003
  7. Lotus 7

    Lotus 7

    We have seen very light volume in the market and trying to trade this enviroment can be difficult.

    the question to ask is what moves the market the answer "THEY"

    THEY = large institutions and Hedgies.

    If they walk away we experience light volume. the market just chops around

    Light Volume days" Light volume days = difficult trading environment. Programs kick the market around, many false signals, and no follow through, many traders tend to over trade on these days. and get chopped up. It is just as important to know when NOT to trade than it is to know when to enter. Always remember to look at what type of environment you are in

    Lotus 7
     
    #37     Feb 22, 2003
  8. this thread shows why as a trader you cant have opinions or bias... my "opinion" on friday was flat to down, probably the majority of what everyone expected (althought there has been some buying interest as of late esp. in the afternoon, so that also should be in the back of your mind...)
    but not having a bias or opinion, when i saw the spoos rally i went long and kept with the trend, made a nice little chunk, esp. the retailers were ripping!
    so if you had an opinion and traded your opinion and kept short, friday was painful....check your opinions at the door.

    i think its futile and and a waste of energy to try and out think the market and play guru, BUT.....

    i think a nother log that fueled the fire on friday was that 835 was a nice support which broke and coincided with the oil fire, so every one and there grandma went short....

    whoever posted they sandbagged the longs and shorts to short more and made tehm regret being born (hilarious) was a nice and cogent explanation..
     
    #38     Feb 22, 2003
  9. A phenomenon I called forcing (see the image extracted from my guide below) happened on Tuesday explaining the pullback we had on the 7938 theorically (in real 7935) the next day:


    example from the guide ...
    <IMG SRC="http://perso.wanadoo.fr/harrytrader/dji/011102/seance.gif">


    applied to Tuesday/Wednesday:

    <IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&attachmentid=2831>
     
    #39     Feb 23, 2003
  10. more people buying stocks than selling, WAKE UP!
     
    #40     Feb 23, 2003