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This method of analysis was created by the head equity strategist at Salomon
Brother in the 80's who now spends his time on Wall Street Week and I
think - running an advisory web site (I was at Salomon when he was there) ..
his name escapes me but he is distincly identified by his raspy weak voice
that is barely audible .. to the best of my knowledge this entire system has
been exposed as valueless .. his record on Wall St Week was abysmal and
noone at Salomon was impressed .. but it does sound logical that if you
observe that customers must reach out and pay the ask to get a block of
stock then that is a sign of strength and vis a versa .. - if only it worked
----- Original Message -----
From: "Wayne Mathews" <wayne@xxxxxxxxx>
To: "=omega list" <omega-list@xxxxxxxxxx>
Sent: Wednesday, May 24, 2000 5:10 PM
Subject: Buyers and Sellers (or Bid and Ask)
>
> There is in TS 2K an ActivityBar indicator called Buyers vs Sellers. The
> calculation for this compares Best Bid/Ask prices against trade prices
> to determine if the trade was at the bid or ask. If the trade was at the
> ask it is called a buy and considered as buying pressure (up). If at the
> bid it is called a sell and represents selling pressure (down). Thus,
> how many "buys" and "sells" per unit time is suppose to indicate overall
> buying or selling pressure. But is this correct thinking? (Has anyone
> found these ActivityBars of any use?)
>
> My understanding is that one can both buy or sell at either Ask or Bid.
>
> A limit order to buy is placed at the bid (and hopefully filled there).
> (It could be at the ask but then why not just place a market order at
> ask?). A market order to buy is filled at the ask (nobody is going to
> fill it at the bid).
>
> A limit order to sell is entered at the ask. A market order to sell is
> entered at the bid.
>
> Unless you know (which we do not) if a trade is a limit order or a
> market order, I do not think one can not tell if it is a buy or sell,
> even knowing if it when at the bid or ask. And therefore, one can not
> tell anything about buying pressure or selling pressure.
>
> Comments?
>
> wayne
>
>
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