Posted by chartboy on 24th of Jun 2011 at 07:59 pm
"The" Russel rebalance is a thing of the past. It is no longer
"the" event that it was a decade ago. Today's rebalance no longer
occurs in minutes or hours like it used to. Now the rebalance
goes on for months before the actual settling
trades/prints occur.
In the case of URRE...6 million shares went up on the closing
print alone. That means virtually all of that stock was effectively
"crossed". For every seller that needed to
get out of the stock at the close due to the
rebalance...there was, relatively speaking, almost as
many buyers that needed to into the stock which
they likely previously sold for the sole purpose
of rebuying it in the rebalance from those sellers.
In summary...that volume does not represent true new buying...it
represents the culmination of weeks or months or
artificial selling with the expectation that the stock could
be bought on the close today from the index
sellers....
If you want to read anything into it...watch the relative
performance of the stock on Monday vs its sector and the market.
Its relative strength/weakness will tell you who miscalculated the
rebalance numbers, (the buyers or sellers), and accordingly if the
stock is "put away" in good hands, or "plugged" in the hands of
guys that were nothing but "renters" of the stock for a trade.
C
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URRE volume spike
Volume spike on URRE today
Posted by mikeovanes on 24th of Jun 2011 at 05:33 pm
Hello:
I was curious to know why do you think the price did not spike up on such huge volume?
Thanks,
Mike
Simple...
Posted by chartboy on 24th of Jun 2011 at 07:59 pm
"The" Russel rebalance is a thing of the past. It is no longer "the" event that it was a decade ago. Today's rebalance no longer occurs in minutes or hours like it used to. Now the rebalance goes on for months before the actual settling trades/prints occur.
In the case of URRE...6 million shares went up on the closing print alone. That means virtually all of that stock was effectively "crossed". For every seller that needed to get out of the stock at the close due to the rebalance...there was, relatively speaking, almost as many buyers that needed to into the stock which they likely previously sold for the sole purpose of rebuying it in the rebalance from those sellers.
In summary...that volume does not represent true new buying...it represents the culmination of weeks or months or artificial selling with the expectation that the stock could be bought on the close today from the index sellers....
If you want to read anything into it...watch the relative performance of the stock on Monday vs its sector and the market. Its relative strength/weakness will tell you who miscalculated the rebalance numbers, (the buyers or sellers), and accordingly if the stock is "put away" in good hands, or "plugged" in the hands of guys that were nothing but "renters" of the stock for a trade.
C