Okay, take several things first into consideration. First, all of the quotes you see on level 2 are listings through market makers. A portion of them will be client's orders, (you, me, or an institution (such as USB or any other big bank) which I don't feel is the case yet), and a portion of them will shares that the market maker is looking to take for themselves. Additionally, take into consideration that a market maker is required by law to have a quote listed for every stock that they are contracted to list. This is the reason why you see quotes of .01 and 999.99 before and after the bell, the market maker is simply fulfilling that requirement. The thing is, your addressing a specific issue, which is valid, but you are attributing the wrong ideas to the situation. You want the stock to go up, okay great, we want the same thing, but blaming smart traders for being smart and waiting for a pull-back is wrong. Blaming people for trying to get filled passively at the price they want is incorrect. If there is real buying pressure, the stock will go up, a market maker can't fight it, and they will switch sides when they see the direction orders are coming in on. There will always be a bid and an ask. If there wasn't then the stock wouldn't be able to trade. Someone has to represent the bid and the ask. Therefore traders being on the bid and the ask is necessary. It's much better to wait for a pullback and get filled passively then be a knucklehead that chases a stock price. Basically you are asking individuals to do the 'heavy lifting'. This isn't the place of individuals, but institutions. I very much recommend you (and 99% of people who post on boards) to join a prop firm so you can gain a fundamental understanding of how market makers, floor specialists, institutions operate, and how back office operations of firms operate,or at the very least make friends with a specialist/market maker. It will alleviate a lot of confusion you have when you 'just can't figure out what the heck is going on with a stock'. Cheers. Oh by the way, being able to converse with someone in the industry may be closer than you might expect ;)
