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Re: mackenzian post# 36528

Friday, 11/16/2007 2:40:44 PM

Friday, November 16, 2007 2:40:44 PM

Post# of 107353
mack, here's an exaggeration that may help get the point across:

let's say a MM starts dropping the price artificially before the market opens. traders see this and they get scared, so they start dropping their bids. let's say the MMs are able to gap the price down .50 at the open.

then one trader (or even a market maker, for that matter) hits that bid for 500 shares.

in this example the "selling pressure" was only 500 shares.

then let's say other weak hands get spooked and put some orders on the ask. the size of their offers (on the ask) might be 500 shares or 5,000 shares.

now buyers step in and start cleaning out these shares. remember, those of us buying are hitting shares on the ask.

meanwhile, you look at your balance in your account and see a large "paper loss".

does this mean the market sold the stock off? or was it under accumulation, and influenced by market maker manipulation?



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