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In a message dated 97-07-14 22:15:38 EDT, 5150@xxxxxxxxxxxxxxx writes:
<< Subj: Re: Day Trading
Date: 97-07-14 22:15:38 EDT
From: 5150@xxxxxxxxxxxxxxx
To: Intel55@xxxxxxx
CC: realtraders@xxxxxxxxxxxxxx (RealTraders Discussion Group)
Intel55@xxxxxxx wrote:
...
> 500 handles + in the blink of an eye. A few weeks ago I saw it offered
down 3
> handles with no bids in site....if you were long you were losing and no
way
> to get out. I always love hearing :" 800 even offer (ex 92800) " then "600
> even offer on a hundred" " 400 even offer" "LIMIT OFFER"!!!!!!!"
I invite comment on the following...
I've heard it said that the reason behind these kinds of moves and market
conditions is the use of sell programs on the part of funds that want to
exit long positions in the underlying issues of the S&P stocks.
The procedure goest something like this:
1. Short the spooz.
2. Sell your stock, causing the cash index to drop, pulling down the spooz.
(PREM opens up, sucking in other sell programs at times.)
3. Before you're done selling, cover your spooz short.
4. The profit on the spooz short mitigates or even outweighs your slippage
on the equity exit.
Because you're the fund selling the stocks in the index, you know when to
cover the spooz with exact timing.
The fellows in the pit are wise to this and know when these programs
are coming in so they're careful to stand back.
Lately we've been seeing a lot of these "afternoon selloffs" that seem to
hit
just after lunch. The equities go up in the morning, hang around for a
while during lunch, and then you might get a few minutes of warning as
the slide starts to hit before it turns into a full on rout. Then as
suddenly as it came on, it goes away. For an example look at the spooz
today from 1350 to 1530 to the close. (Who picked those numbers anyway?)
True or False? Comments RT?
Phil
>>
Pretty much, it makes sense to go short b4 you are selling alot of stock.
Each morning on the CQG machine the days "buy" and "sell" numbers are given
and most traders watch them throughout the day. Watching the cash also tells
ya what is going on.
We were just farting around today. We went up a lil in te moring and then
went sideways, broke a 30 min trend line,then broke a 10 minute double bottom
, spkied lower from 92050 and then made it all back into the close. Just
another snap and pop. Just following the trend lines on different minute vars
in the S&P can yield good results. Also Market Profile hit right on today.
Should be fun on tuesday and wednesday.
Jim
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