Trading Analysis - 1st Nov 2018


1 November 2018


We see the normal behaviour - an initial walk down - even going negative at one point - to try and shake out any waverers, followed by a series of step ups. The buys show a sawtooth pattern as on each step up they try and spike overenthusiastic buyers - better to keep your powder try and wait until the buy price has fallen somewhat after each rise before picking up new shares. As you can see the trading, at least that part of it that we are currently permitted to see, is roughly in equilibrium. I suspect that delayed trade reports will show that there is a large buyer behind the scenes.

End of Day

A very busy day. But not the busiest - that was the 26th September when there were 429 trades to analyse - today there were 'only' 406.

Tomorrow will be busier. Mark my words.

There is clearly a change of behaviour at a quarter to two - before this point there was at least some attempt by the market makers to keep a lid on things - note how one of them may have even had thoughts of building a short position (more Buys than Sells) that they might be able to close at lower prices later in the day.

At a quarter to two something happened to change that point of view - perhaps they lost their nerve or perhaps there was a large buy behind the scenes. I can see no smoking-gun feature in the trade logs apart from a 240K Buy at 13:51:15, followed by 2x100K further Buys which rapidly reversed the negative nett trade position back to being positive again.

After this point the SP seems to curve ever upwards - trading becoming even more frenetic, and somewhat counterintuitively, the nett trade position stays close to the zero line until the end of trading. It is this last feature that is most interesting - it indicates that the MMs are operating in a pure 'churning' mode - they are simply selling precisely what they can buy - the thoughts of selling shares that they hope they might be able to buy later on have been totally banished.

The MM behaviour has switched to buy first and only then sell what you've been able to pick up. They dare not risk selling now and trying to pick up the shares later because the price will inevitably be higher.

The market is effectively in a freewheeling up mode - the wheels have not come off the wagon, but rather they have been put back on it, have been oiled and greased, and the wagon has been fitted with a rocket motor to get it moving. 

The after hours trades, specifically the trade of 556,400, are harder to pin down - perhaps they are worked buys from during the day, rather than sells at the closing position. It is hard to draw a conclusion from what happened after 4:30pm today.

Thus there is no real evidence of any PI/trader selling prior to the close or that day traders have even spotted this share yet. As I say I think tomorrow will be even busier than this.

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