Update - CAL URBN MA
CAL showed the most pre-market trading that I have seen in a while. It opened at 7:41am at $27.10 after trading last night above that. There was a trade of 17,300 shares at 8:40am at a price below the other trades at $26.90 after the stock had hit highs before that of $27.30. Is this the specialist/MM/hedge fund up to something? 2 minutes later the stock was up immediately to $27.25 and re-hit its high in the pre-market of $27.30 at 9:26am. At the open of 9:30am I see some conflicting numbers. In one place I see $26.90, the same price as the big trade in the pre-market and the other place says it opened at $27.80, a rather large price jump from where it traded only minutes before. In the first few minutes of trading we saw an initial high of $27.86 with a quick drop to $27.52 a few minutes later. The stock then showed some volatility and hit a new high of $27.90 before dropping later in the day to a low of $27.14 as the market cooled off.
Also of note, just before 11am there was a huge volume spike of almost 400,000 shares. My guess would be the 17,300 shares bought in the pre-market was a buy that was sold into the 9:30 opening spike, and the 400,000 shares was a short as that was at the EXACT time of the high for the day. Someone that can afford 400,000 shares I don't think is buying at the top.
As a commenter indicated URBN was pushed down so much in the pre-market on Cramer's sell recommendation that it actually spiked up at the opening bell. It did reach break-even territory near mid-day before falling a bit as the market weakened. So this is the Cramer effect on a sell recommendation. He says sell, it goes down and then spikes up. Of course this one example doesn't define the rule, but interesting to see this happen. Again, my stance is to definitely not short his sell picks given today's example as a good reason, and because the trading edge just isn't there.
MA which I didn't consider a short for had a strong start going up early and then fell pretty heavily. The volume wasn't very big at the opening bell and the pre-market action was light, with no large block trades. The final volume for the day was well below average as well. So I think its safe to conclude that the drop had very little, if anything to do with the Cramer effect.
posted by CramerTracker @ 6/20/2006
2 comments
Comments on "Update - CAL URBN MA"
-
Anonymous said ... (June 20, 2006 6:26 PM) :
-
CramerTracker said ... (June 20, 2006 6:52 PM) :
post a commentShorting Cramer's picks on the NYSE (or AMEX) might be different then on the Nasdaq. I am not familiar with how the specialist system works exactly.
If there is a human specialist then he will probably have his own intentions. I suspect that not all of these specialists will let a stock run its own course. If the human specialist knows that Cramer made the recomendation or sees some unusual spikes, then he (the specialist) might try to correct it. The specialist also might be working for other people on the side. You never know and, with all these scandals, you know that its totally possible.
The NASDAQ might be a little more fair in that respect, although, they probably can manipulate that system too.
Thanks for your thoughts on the specialist system. I have read some Richard Ney who goes into the specialist activities, and often times corrupt activities, and these big blocks instantly came to mind. I agree that it should be different on NASDAQ traded stocks since it is "electronic". I would have to check, but on the NYSE and AMEX they have specialists and on the NASDAQ there are MM's or vise versa. CAL in todays example was an NYSE stock so I think those big volume trades may be clues as to the direction of the stock. For those who don't know, specialists are the brokers for brokers and basically know everyones buy and sell prices, including stop loss numbers. They can then buy shares, sell shares, and short shares to make for an "orderly market" but are also allowed to profit off their own trades (at least thats the way it used to be from my understanding, but it may have changed). So they obviously have a very large edge over us small time investors. So it is possible when there is a large block trade, like the 400,000 shares today it could be the specialist buying or possibly shorting a stock. And like I said, my guess, based on hindsight, was that it was a short sale since the stock instantly went down. Now, the trick is to figure out what might be happening in real-time when these big trades occur. Is someone buying and the price will probably go up, or did they just short and most likely the price will come down. In today's case, since the stock was close to $28 and was up pretty big on the day that calling that it was a short would have been somewhat obvious.