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John:
I can relate it to something I often saw before the cash FX market went to
EBS [Electronic Borker System]:
Your first inclination is to hit the bid, because there are what appear to
be huge offers above the market. But sometimes, what seems apparent, ain't
necessarily so. Prices get manipulated and any market maker that's worth
their weight in salt will soon learn how to get long at the bottom by
manipulating the quotes. Were you watching a market maker's Globex screen?
Or a vendor's squawk box or the CME's free quotes?
When I had large orders to buy US dollars against either the yen or the
dmks in the cash markets, the first thing I would do was go out and
'noisily' sell $100 million US. Then the fun begins...Once people "know"
you are selling or have an interest to sell, it's very easy to get 10 times
that amount in cheap dollars before everyone wakes up. It works the same
way in this situation. Someone was a quality buyer and you only saw what
they wanted you to see.
I'd also suggest that we hit very important price levels on the downside
today. As I said on my web site this afternoon, IF price is to remain in an
uptrend, it needs to find support at 1224 in the S&Ps and 1825 in the
Nasdaqs. There are open unfilled gaps below the 1211 level in the S&Ps and
1751 in the Nasdaqs...once one of those collapse, we may be right back at
new lows quickly. Maybe someone had a vested interest in buying at 1224?
Best,
Tim Morge
www.medianline.com
>----- Original Message -----
>From: "John Clemens" <jbclem@xxxxxxxxxxxxx>
>To: <omega-list@xxxxxxxxxx>
>Sent: Monday, April 23, 2001 2:30 PM
>Subject: Bid and Ask Size at a bottom?
>
>
> > At 12:09 PST, the ES1M was retesting a local bottom tested 3 times about
>40
> > minutes previously. I was watching the bid and ask size closely(1st time
> > I'd done this) and saw this interesting situation: the bid and ask prices
> > stayed at 1224.00 for a good part of a 5 minute period, the bid price
> > especially did not budge from 1224.00. At the same time the ask size,
>which
> > usually jumps around between 1 and 50-100, stayed in the 400 range for
>the
> > entire period. The bid size was in its low range, 1 to 50-100(don't hold
>me
> > to these numbers but they are faily accurate). I'm using BMI satellite
>for
> > data.
> >
> > Logically, with such a large number of sellers for such a period, I was
> > expecting to see the bid price dip below the 1224.00 level as someone
>tried
> > to entice a lower price, but it didn't happen. 1224.00 was written in
>stone
> > and after the 4-5 minutes the market moved up a bit and then came down and
> > tested 1224.00 again.
> >
> > Would someone like to comment on this? Is the bid and ask size
>unreliable,
> > or am I misunderstanding this situation.
> >
> >
> > John
> >
> >
> >
> >
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