See the trend charts at Charts

I saw the following posted on the Kitco Gold Forum:

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Date: Tue Jan 25 2000 14:29

FROM SCHWAB.com "Urgent Notification Due to extremely heavy trading volume, there is an INDUSTRY-WIDE DELAY in Execution Reports of small, thinly-traded Over-the-counter stocks. These DELAYS may last an HOUR OR LONGER. "

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Shortly before this post, the DJIA and the NASDAQ both rallied off their daily lows; the DJIA was down over 1% and the NASDAQ was down over 2%. The DJIA rallied 150 points but fell in the last 15 minutes or so of trading to finish the day for a gain of 21 points. The NASDAQ had a similar finishing move without the selloff in the final minutes.

Is it so foolish to assume that "they" the market specialists that keep the book on each stock processed the BUY orders before the SELL orders to end the day with a backlog of unfilled SELL orders.

-- Bill P (porterwn@one.net), January 25, 2000

Answers

It might work the other way around...particularly on the NASDAQ where there are true market makers for each stock. I don't think what you are proposing makes sense. Buy orders are matched against existing sell orders.....if there are a shortage of sell orders at the price of the buy orders then those buy orders are not executed. If a buy is at the market, that means that the buyer is looking for a seller at whatever price will move a block of stock. So...if there were an excess of sell orders prior to closing and the buy orders were executed into them, this would cause the price of stocks to close lower not higher. The only way a buyer will end up paying more is if there is no stock available...hence the price continues to be bid up until some existing sell order is triggered at the level the buyer is offering.

Maybe Im just confused but still what you are suggesting doesn't make sense to me.

If you look at the NASDAQ volume for the day you can see that there is no particular uptick in volume for the end of the day. The slope of the volume graph is the same from about 1pm on to close. So what I did was look at some of the heavy cap stocks that make up the NASDAQ like MSFT, SUNW, DELL and a couple of internet stocks like VIGN. To a stock they were well off of session lows and most had good gains in the last hour. There is your answer, it was a rally in tech stocks.....No surprise there, the tech stock craze just dies hard or maybe not at all.

-- William R. Sullivan (wrs@wham.com), January 25, 2000.

Unless you are moving large blocks, or are a daytrader, the intricacies of this degree of "market manipulation" will not affect you. Eventually buy and sell orders get reconciled, and the market moves accordingly. No MM can buck a cumulative opinion on one side or the other forever.

-- I'mSo (happy@prepped.com), January 25, 2000.

You will frequently see last hour swings due to the shorts covering their a--, or the longs taking profits. (Same thing, really).

If you think the market is being manipulated unfairly, buy puts or calls (or futures contracts) depending where you suspect the imbalance is...then pray that it IS manipulated.

-- Joseph Almond (sa2000@webtv.net), January 25, 2000.