|
PureBytes Links
Trading Reference Links
|
Brian Massey wrote:
> Richard,
>
> Thanks for your interesting post. I've been considering getting one. A
> comment you made caught my eye. How can you tell players and their size
> from the price chart?
>
> Thanks,
> Brian
Dear Brian & Group,
I've been watching the S&P chart, tick by tick, since '85, so I have some
familiarity with its price action. Two observations that I've made and
conclusions that I've drawn I believe that I now have some confirming evidence
for, courtesy of the squawk.
Observation #1: I often observe that a price will act as very strong support or
resistance for several minutes on a 1-tick chart; furthermore, the price during
that minute or two will hardly move off that support or resistance price,
usually by no more than 2,3, or 4 ticks, and that successive ticks with usually
be no more than 10 cents apart. For example, if support is 8.20, the market
will work up and down from 8.20 to, say 8.50 for several minutes and then break
out, either rebounding up above 8.50 or by taking out the 8.20 support. I have
presumed that somebody in the pits is heavily buying the 20s for the duration
that that support holds and that the price continues to hover slightly above
8.20. What I have heard during my use of the squawk confirms my presumption.
Today, for example, the squawk reported that some local came out of nowhere in
the middle of the pit and offered a price for 1000 cars. During the next
several minutes, his offering price acted as resistance, and the market hardly
budged off his offering price until he was finally filled, 1000 cars later,
after which, the market shot to the upside in a continuous stream of ever
ascending bids.
Observation #2: I often observe that the market will oscillate back and forth
for longer periods, 15, 30 minutes in an observable trading range, but unlike
the former situation, here the support and resistance prices are much less
tight, and the moves up and down are wider, and often the ticks jump between
successive closes. For example, a trading range between 5.50 and 6.80, more or
less, with erratic and uneven ticks, often jumping 20,30,40 cents between
successive closes. I have presumed that this means that no one is trading any
size, that only the locals are trading, that they are trading only onesies and
twosies, and they are hitting each others offers or taking each others bids,
and that the bid/ask spread is the 20, 30, 40 cents that I observe between
successive closes. I have repeatedly heard the squawk confirm my presumption
on this as well.
Is this the kind of answer that you werre looking for?
Sincerely,
Richard Josslin
>
>
> -----Original Message-----
> From: Richard Josslin [SMTP:oldfogey@xxxxxxxxxxx]
> Sent: Monday, June 22, 1998 6:57 PM
> To: MICHAEL STEWART; omega-list@xxxxxxxxxx
> Subject: Re: Internet Squawk for S&P
>
> MICHAEL STEWART wrote:
> > Does anyone receive the internet squawk for the S&P ?
>
> I do, for both S&P and Bonds.
> > If so do you find it
> > reliable
>
> It works for me probably around 95% of the time. The rest of the time, it
> mysteriously goes silent then later resumes, sometimes in a second or two,
> less frequently in a minute or so.
> > and or useful?
>
> I believe so, but I haven't found great use for it. Somewhat to my
> surprise, I find that it and my datastream (BMI satellite) are remarkably
> synchronous. Remember, however, that the squawk gives bids and offers (not
> closes) while the datastream gives closes (not bids and offers) - so one
> can't compare exactly. I just haven't found the datastream to lag as
> others have - what I've read in vaarious posts by others is an occasional
> lag (in a fast market) of 20,30,...60 seconds. The most lag I've seen is a
> second or two.
> One benefit of the squawk is that they routinely comment on the players and
> the size. So when Dean Witter steps in to buy 1000 cars, as they did
> today, that's broadcast. Similarly, when the only trading is by the locals
> and doing ones and twos, that too is broadcast. Much of this, in my
> opinion, can be inferred straight off the price chart, but with the squawk,
> there is no doubt.
> I have yet to hear anyone for whom the squawk made a quantum jump in their
> profitablility. It hasn't mine - yet, I continue to take it and believe
> that it is worth it's cost, $100/month, billed quarterly. If there is one
> or more of you out there for whom the squawk has made all the difference in
> the world, I sure would like to hear how it's helped --- maybe I just don't
> know how to take proper advantage of it. In which case, I would very much
> like to learn.
> Sincerely,
>
> Richard Josslin
|