You're welcome, Houndish! I think all's well.
I may not have figured out all the subtleties of trading and investing (yet), but I'm a determined learner, and people are always the same wherever you go and whatever they do. They're all looking to make a buck, and you can always count on them to serve their own self-interests very predictably. After that, it's all pattern recognition, and that's the knowledge I'm after here. I want to become familiar with the patterns of trading behavior, and wow, today was, from that particular perspective, pretty cool.
(Now we two know that the New Englander has a more refined and noble nature than the rest of his countrymen, but we'll play along, eh?)
If, as dave02835 indicates, these shares were bought by MM's, I don't find that very disuassive since those guys make money on spreads, and if they're buying, it's only ever because they fully expect to be able to sell for more than they paid - it's what they do. If they consistently did otherwise, the would cease to exist. They're here, so they must be buying cheap and selling dear since even shorting relies on that immutable premise (just in reverse order). If they were buying in volume today, what does that tell us? What's more, if they manipulate prices (gasp!), with all this freshly looted stock in hand, what direction do you suppose they'll try to drive the price tomorrow?
And check that volume. 1.7M shares? Again, that didn't fall into a hole somewhere - somebody bought it. Somebody paid cash for it all, and whoever it was didn't do it out of charity. They did it because they fully expect to sell it for more. Should we expect otherwise? If we do, why did we buy the stock? I'm finding myself wishing I had an extra 50 grand laying around somewhere that I could put to good use here.
In fact, the decline in price couldn't even be sustained because of the renewed demand. It "bounced". If there was something wrong with the company, and it was known by MM's due to a 'leak', why would we think they would buy it now if they knew it was headed even lower on bad news? I'm admittedly inexperienced, but even I'm not dumb enough to do that, so I'm gonna guess they wouldn't either.
So if dave's right about who's buying, that could be reasonably interpreted as supportive of the stop-loss theory. I would have to imagine that a real problem wouldn't result in today's brief downward spike followed by an upward spike. Furthermore, the subsequent increase in price didn't occur as the result of long-standing limit orders - those get triggered on the way down or not at all; they don't get triggered on the way up. That means that the last half-hour of trading was people slamming buy orders through. That's pretty active interest.
I held Motorola stock a number of years back (rather passively, I'll admit) through a bad period, and it didn't bounce much when it went bad, I can tell you; it looked like a black diamond ski slope - with a traversing ravine or two for extra fun. It took years to get back to where it used to be. I've also recently held an alternative energy stock that took a 20% beating, and bounced back 45% - on no news whatsoever.
I like reading the opinions on this board - even the angry ones help me get a feel for the person behind the alias - but I'll think for myself insofar as I'm able, and remain grateful to the people who are honest enough to say what they really think, even (especially) when they run the risk of looking dumb.
Right now, I'm not afraid. After all, I didn't lose anything today. I'd have only lost money if I'd sold, and I didn't sell. I still own every share I ever bought of this stock, and I haven't seen anything that persuades me to believe its potential has waned even a little bit.
Later this year, when it drops from $9.00 to $7.50 on a "raid" like today, I'll just go ahead and let some MM take advantage of my misplaced stop-loss. You'll all be wondering who the idiot was that sold at $7.00. I'll spoil the ending for you now - it was Kancamangus! HA!
aquila non capit muscas
