Comments on: Who Set The Price? http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/ Learning and sharing investment knowledge. Thu, 17 Mar 2011 02:30:53 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Timothy http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-23882 Timothy Sat, 03 Feb 2007 19:06:01 +0000 http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-23882 What a great site What a great site

]]> By: Dan http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3481 Dan Fri, 18 Aug 2006 06:16:17 +0000 http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3481 Repeat - earlier comment was cut off: <i>Still, the stock was in a downward trend since April and this should have been a sign to any investor that SiRF was headed for trouble.</i> The fact that the stock was declinding does not necessarily indicate the company was in trouble - just that the stock price might be in trouble. <i>Since the stock was in a downward trend to begin with an intelligent investor would anticipate a greater sell off than might be appropriate and would in turn buy at that time. I'd like to think that makes me an intelligent investor, but don't give myself that much credit. Still, it was nice to come back from vacation and see the current price over $24 :-)</i> Repeat – earlier comment was cut off:

Still, the stock was in a downward trend since April and this should have been a sign to any investor that SiRF was headed for trouble.

The fact that the stock was declinding does not necessarily indicate the company was in trouble – just that the stock price might be in trouble.

Since the stock was in a downward trend to begin with an intelligent investor would anticipate a greater sell off than might be appropriate and would in turn buy at that time.

I’d like to think that makes me an intelligent investor, but don’t give myself that much credit. Still, it was nice to come back from vacation and see the current price over $24 :-)

]]> By: Dan http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3479 Dan Fri, 18 Aug 2006 06:09:04 +0000 http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3479 >Still, the stock was in a downward trend since April and this should have been a sign to any investor that SiRF was headed for trouble.Since the stock was in a downward trend to begin with an intelligent investor would anticipate a greater sell off than might be appropriate and would in turn buy at that time. >Still, the stock was in a downward trend since April and this should have been a sign to any investor that SiRF was headed for trouble.Since the stock was in a downward trend to begin with an intelligent investor would anticipate a greater sell off than might be appropriate and would in turn buy at that time.

]]> By: Brennan http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3358 Brennan Tue, 15 Aug 2006 22:28:25 +0000 http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3358 Of course the gapdown is dictated by the first and second support levels but when the price falls below these supports one must take into consideration both fundamental and technical indicators in determining whether or not the current price is justifiable. Since the stock was in a downward trend to begin with an intelligent investor would anticipate a greater sell off than might be appropriate and would in turn buy at that time. A day trader would then have new support and resistance levels to consider. Of course the gapdown is dictated by the first and second support levels but when the price falls below these supports one must take into consideration both fundamental and technical indicators in determining whether or not the current price is justifiable. Since the stock was in a downward trend to begin with an intelligent investor would anticipate a greater sell off than might be appropriate and would in turn buy at that time. A day trader would then have new support and resistance levels to consider.

]]> By: thebulltrader.com http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3347 thebulltrader.com Tue, 15 Aug 2006 19:11:20 +0000 http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3347 the price target on a gapdown is dictated by support levels. technical analysis is what determines short term stock prices, not fundamentals. the price target on a gapdown is dictated by support levels. technical analysis is what determines short term stock prices, not fundamentals.

]]> By: Brennan http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3298 Brennan Tue, 15 Aug 2006 04:29:52 +0000 http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3298 "Given that a market is simply people coming together to buy and sell things, it is sometimes odd to reflect on how the market seems to be an independent living entity - something with a purpose of its own. And its implacable...We know markets are simply the accumulated decisions of multitudes of people, but we still tend to think of a market as a conscious thing rather than a process." -"The Nature of the Beast", Active Trader Magazine (August 2006) If you all take a look at the 1 year chart, the price broke out of its upward trend late April. This said, the price dropped significantly from July 3rd to the 13th and most notably, July 25th. Dan refers to this as just "bad news" however a negative earnings report is just plain BAD, no quotations necessary. I agree with Dan in that surely a great number of investors noticed the sell-off and ran with it without doing their due dilligence and researching the stock for themselves, instead of identifying the specific reasons for the sell-off. Still, the stock was in a downward trend since April and this should have been a sign to any investor that SiRF was headed for trouble. Take a look at Apple which has much better long-term growth possibilites and stronger financials. Since AAPL came out August 11th and said they would restate earnings the stock has remained flat, in fact, it was even up a dollar or so within the past five days. This information can certainly be viewed as "bad information" but the market, or rather - those individuals that comprise the market, felt Apple would rebound. I lean towards agreeing with this sentiment as Apple is off of its 52-week high of $86.40 but then again...maybe I'm just a little emotional with this investment...I held on to AAPL too long selling short of its high in January. Thankfully I'm just one investor helping to comprise a dynamic and INTELLIGENT market. “Given that a market is simply people coming together to buy and sell things, it is sometimes odd to reflect on how the market seems to be an independent living entity – something with a purpose of its own. And its implacable…We know markets are simply the accumulated decisions of multitudes of people, but we still tend to think of a market as a conscious thing rather than a process.”

-”The Nature of the Beast”, Active Trader Magazine (August 2006)

If you all take a look at the 1 year chart, the price broke out of its upward trend late April. This said, the price dropped significantly from July 3rd to the 13th and most notably, July 25th. Dan refers to this as just “bad news” however a negative earnings report is just plain BAD, no quotations necessary. I agree with Dan in that surely a great number of investors noticed the sell-off and ran with it without doing their due dilligence and researching the stock for themselves, instead of identifying the specific reasons for the sell-off. Still, the stock was in a downward trend since April and this should have been a sign to any investor that SiRF was headed for trouble. Take a look at Apple which has much better long-term growth possibilites and stronger financials. Since AAPL came out August 11th and said they would restate earnings the stock has remained flat, in fact, it was even up a dollar or so within the past five days. This information can certainly be viewed as “bad information” but the market, or rather – those individuals that comprise the market, felt Apple would rebound. I lean towards agreeing with this sentiment as Apple is off of its 52-week high of $86.40 but then again…maybe I’m just a little emotional with this investment…I held on to AAPL too long selling short of its high in January. Thankfully I’m just one investor helping to comprise a dynamic and INTELLIGENT market.

]]> By: Nathan http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3295 Nathan Tue, 15 Aug 2006 03:46:32 +0000 http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3295 I agree with what Allen said. Prices are not really set arbitrarily. The market makers set the price at which they try not to lose money, when accepting market sell orders at the gap. I agree with what Allen said. Prices are not really set arbitrarily. The market makers set the price at which they try not to lose money, when accepting market sell orders at the gap.

]]> By: 7thseer http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3215 7thseer Sun, 13 Aug 2006 17:59:21 +0000 http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3215 Good article. It is amazing how many market contributors agree on the price level so quickly after good/bad news. I have always thought the large institutional traders mostly set the general level for the stock by the sheer mass of their trades. And then there are the stocks with very little volume. Good article. It is amazing how many market contributors agree on the price level so quickly after good/bad news. I have always thought the large institutional traders mostly set the general level for the stock by the sheer mass of their trades. And then there are the stocks with very little volume.

]]> By: Allen S. http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3179 Allen S. Sun, 13 Aug 2006 04:00:58 +0000 http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3179 I used to wonder about those same gaps myself...until I read "Day Trade Online" by Christopher Farrell. It turns out that on the NYSE and Amer. Stock Exchange, each stock has a specialist who sets the price. He's the same guy who sets the bid ask spread. He makes money on that difference, but also risks money on setting where the stock will open. He'll buy (at his setting price) when everyone else wants to sell on bad news. He knows that stock better than anyone else and thus has a good idea of where to set the opening. Farrell describes it fully in a couple of chapters. Allen S. I used to wonder about those same gaps myself…until I read “Day Trade Online” by Christopher Farrell. It turns out that on the NYSE and Amer. Stock Exchange, each stock has a specialist who sets the price. He’s the same guy who sets the bid ask spread. He makes money on that difference, but also risks money on setting where the stock will open. He’ll buy (at his setting price) when everyone else wants to sell on bad news. He knows that stock better than anyone else and thus has a good idea of where to set the opening. Farrell describes it fully in a couple of chapters.

Allen S.

]]> By: Brennan Woods http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3141 Brennan Woods Sat, 12 Aug 2006 01:58:36 +0000 http://www.investorgeeks.com/articles/2006/08/11/who-set-the-price/#comment-3141 In the long run the market is almost always right. Of course the markets are going to either over-sell or buy a stock, in the short run, but these corrections are what makes the market exciting and profitable for the smart trader. In the long run the market is almost always right. Of course the markets are going to either over-sell or buy a stock, in the short run, but these corrections are what makes the market exciting and profitable for the smart trader.

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