That's as good as an explanation as any, but where the orders appear on the DOM and the length of time they appear it reminds me of a bluff in poker, or a signal. I'm talking 2000 or 3000 contracts appearing for less than 5 seconds sitting on one price.
It's quite possible that what are suggesting can move the market on low volume, trendless days ... but when the markets are making a big run (Friday's S&P, Oil, etc.) they're meaningless.
Whatever it is, I do agree it's a tell. Seems to happen a lot on the individual stocks, too. Probably would be worth writing some code to look for that kind of thing. My husband has been itching to help me trade some, maybe I'll get him working on that. What a strang "honey do" list I have
I don't know, but I just picture two big hedgefunds getting together on a daily basis and saying ok, when you see one order for 3000 contracts appearing on the dom for 5 seconds we are going long, and if you see 2000 we are going short.
LOL at the fact that this kid posted this on a public message board. If your friend is about as smart as you, I feel sorry for the investors of that hedge fund.
Considering how little regulation there is in the hedge fund industry, particurarly the offshore ones (Cayman Islands), they can get away with a lot of manipulation. Anyone who thinks that hedge funds do not collaborate with one another is just being totally ignorant.
I've heard it called "painting the chart". If one could paint a pattern like a cup and handle, that would be true artistry! The real painting is done during slow times like lunch when traders attempt to lure in other traders with false breakouts and breakdowns.