A Little Fun Stock Education on Big Players

Posted by Blain Reinkensmeyer on Monday November 6, 2006

I have already commented on AAPL being a great stock watcher this morning when it was at around $79.30, well now the stock is trading close to $80, and I have something to point out that makes me shake my head at the “big players / big fish / big boys”. Look at a detailed quote of AAPL and you will notice that the high on the day is $79.99, and though you may not think much of it, this is the result of hard work by the big guns. I will explain further.

I am assuming not everyone is watching this particular stock, but everytime someone trades a share of AAPL stock, I know the price, the number of shares, and at what time down to the second it was purchased or sold. This allows me to see when strong volume causes the stock to move upwards which is bullish, or tell me that a low volume decline is just temporary (see my play on ISE from last week for an example).

Well, when AAPL ran up to the $79.99 point, it was on very heavy volume, and the reason it did NOT hit $80 is because a few big players did not want it to. Why not? Stocks almost always have tons of orders waiting to be activited at flat prices such as $1, or $10, or $15, $50, $100, etc. If you are bearish on AAPL and your hedge fund owns a few hundred thousand shares, you will eat as many shares as you can before 100+ buy orders can get thrown into the market automatically. As a result, Apple didn’t touch $80 yet today, and the bears can breath for another minute.

One thing I always remind myself is that the stock market is a GAME; it’s game with all stars and newbs (as we speak of in the gaming world). The all stars run the show, and the newbies just try to stay above water. At any given moment the Big Guns or All Stars can influence a particular stock. Play by the rules and you will get burned. Yes, I will say it again, play by the rules, and you will almost always loose. Just something to ponder about!

Happy Hunting :p

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Pingback by AAPL Breaks $80 Discussion - Stock Trading 101
2006-11-07 12:21:09
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