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Stan:
Thanks for those valuable insights. About the best explanation I have
seen for the process you describe is contained in a book by; I believe
Hadday (sp). He uses examples of volume to explain how and why
contrary opinion works and as you say, there can be one seller/buyer
for many others in number on the other side of the trades.
In this same connection, institutions often sell on a scale up and buy
on a scale down; skewing the classical interpretation of the story that is
going on behind the volume numbers. Finally, there is the process
of 'bunching orders' where it might appear one big buyer/seller has
committed money at a certain price level except that the order placed
is actually from many individual traders.
Chas
-----Original Message-----
From: Stan Book <sbook@xxxxxxxxxxxxx>
To: realtraders@xxxxxxxxxxxxxxx <realtraders@xxxxxxxxxxxxxxx>
Date: Saturday, March 31, 2001 2:19 PM
Subject: RE: [RT] Buyers/Sellers/Money market
>I was sure someone smarter than I would post the authoritative answer.
>
>This is a great mystery and certainly not a silly question. I'll give it a
>try.
>
>It is true that every share bought is matched by a share sold. This is very
>different from the oft quoted conclusion that for every buyer there must be
>a seller. Fifty buyers may be matched by a single seller, or vice versa.
>Perhaps the clearest example occurs at high volume turning points where a
>relatively few smart players accommodate the buying or selling frenzy of
the
>masses.
>
>The market has many participants including: true insiders who consistently
>buy wholesale and sell retail; professionals who are proficient at reading
>the signs and manage to accumulate inventory from the public at relatively
>lower levels and distribute it back to the public at relatively higher
>levels; facilitators who try to pick quick profits out of the ebb and flow
>of price movement; and, retail players (the public) who typically buy high
>and sell low over the longer term.
>
>In selling panics, the buyers of last resort are the market insiders
>followed by the professionals. In buying panics, the sellers of last resort
>are the market insiders followed by the professionals.
>
>Money does indeed flow into and out of markets. Capital is transferred from
>cash to bonds to equities to real estate to collectibles etc. These flows
>have been studied and interpreted extensively by others.
>
>While common wisdom is that the flow of capital drives prices, some
analysts
>believe prices drive the flow of capital. This makes sense considering the
>source of capital from which the other players make a living is the public.
>
>I hate to sound so cynical, maybe someone has a more upbeat explanation.
>
>
>
>
>-----Original Message-----
>From: Don Ewers [mailto:dbewers@xxxxxxxxxxxxx]
>Sent: Thursday, March 29, 2001 3:55 PM
>To: Real Traders
>Subject: Fw: [RT] Buyers/Sellers/Money market
>
>
>I never heard any replies to this question . . . which means, no one knows
>the answer, no one cares, or it was so obvious it was not worth answering,
>anyone . . . care to try answer it??
>don ewers
>
>----- Original Message -----
>From: "Don Ewers" <dbewers@xxxxxxxxxxxxx>
>To: "Real Traders" <realtraders@xxxxxxxxxxxxxxx>
>Sent: Sunday, March 18, 2001 6:33 PM
>Subject: [RT] Buyers/Sellers/Money market
>
>
>> This is most likely a way too silly question, but if for every seller of
a
>> stock there needs to be a buyer, how does money net sum "move into money
>> market". Is it net new cash that is moving in? I understand how an
>> individual or institutions for that matter move from equities into money
>> market but doesn't that mean someone else bought what the equities the
>other
>> got rid of and increased their exposure? Someone has to own what someone
>> else sold don't they (ignoring company buybacks)?
>>
>> Also if we are witnessing what people call "a buyers strike", that I
>> understand somewhat. What buyers are there are at the bid or under and
not
>> at the ask but they are still buyers or no trade would occur? Is there
>> anything that measures when the strike is over?
>>
>> Ira you probably have something profound to say about all this? What am I
>> missing here in general??
>>
>> don ewers
>>
>>
>>
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>>
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>>
>
>
>
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>
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