george soros did this...his theory was called "reflexitivity" (sp?)- all explained in the alchemy of finance.
Ken Wolfe who posts on Real Money from time to time has a "Dumper Play" strategy where he screens for stocks that are down 20% in pre-market on big volume. He then looks for the stocks to start to come in a few minutes close to the open. If you follow the levels of short selling, and notice that over the past few weeks pros have been lightening up while the public is loading up, this may be a valid strategy for a while. Especially if we start to move up over the next few weeks. But I would be leery of doing it on an overnight basis without some sort of edge or knowledge beyond the fact that it is down, since it can just as easily gap down 2 days in a row. I have thought about both, but between MSO and MO, I would think MO may be a sensible play. MSO is done without Martha, unless they start to sell assemble yourself prison jumpsuits. But MO still has all of the world tobacco markets plus a fat dividend to boot. Just my thoughts, not saying take either since I am just a 6 year old girl playing on daddy's computer.
Tradrmac, when you say "pros have been lightening up," are you referring to specialist versus odd-lot shorts? or perhaps hedge-funds? if it is hedge-funds what is your source? thx
Best oppportunities imo are idiot rumors as GM had a couple days ago , tanked the mkt and GM , then GM denied. Rumor was they were restating earnings. Those are real return to the mean plays.Gotta wonder who starts those rumors, how they gain momemtum and how much they made.
Victor, I pulled this from Value Lines Market Monitor. % of NYSE SHORT SALES BY PUBLIC 10 Week average 49% Week ended 6/13/02 52% Week Ended 6/20/02 56%. % of NYSE SHORT SALES BY SPECIALISTS 10 WK 40% WK Ended 6/13/02 38 % WK Ended 6/20/02 32% Odd lot sales/purchases 10 WK AV (1.1) 6/13 (1.2) 6/20 (1.3) Put Call Volume 10 WK AVE .83 6/13 .9 6/20 .96 I don't have any information on hedge fund shorts. Barrons also has a good weekly section that lists member activity, and it is a much better investment for traders than Value Line in my opinion.
yes, this is my worst fear. proceed [buy] with extreme caution, and don't hold anything overnight Mark
that's good infor trdr. I stumbled across some info that indicated that professionals are currently less committed to the short side (long term) than they have been.