RobotDroid Posted, "In biotech land, there are leaks"
Back in the day — in the last millennium — we were always looking for leaks. They'd show up on the tape. After Denis Levine was caught shadowing his investment banking business with option trades through a Swiss account, that all came to an end. Whenever I hit big on an out-of-the-money-call the compulsory call came from NY Surveillance to check me out. (Somehow they neglected to call when I lost money!)
Irrespective, a few months back I tried to identify "paint on the tape" prior to some good clinical trial news. I couldn't find anything. However, when I examined further there was one thing I noticed. The volume significantly dried up just prior to the announcement. In thinly traded stocks, even more so...
So... Could RobotDroid be exactly correct? "...there are leaks," but the result is that some market makers and key traders withdraw from activity. So... the the tape isn't "painted." Rather, it's "bleached." Nobody wants to violate securities law. I don't. I'd be really pissed if somebody leaked to information to me because I'd stop position-building too. Grrrr.
SO... are we actually looking for low volume? Is this a signal? Also, per my earlier post, could such low volume accidentally trigger another "avalanche" of trading even if the news is not coming? After all, economists have predicted 17 out of the last three recessions.
I've not been following the biotech industry for some time. If you have an example of a biotech that jumped on news please send me the symbol. I'll do some sleuthing to further investigate this conjecture and report.
Cheers from a "false Spring" in Oregon,
Jim
