mmm okmarket makers get super cheap brokerage to supply...

mmm ok

market makers get super cheap brokerage to supply liquidity into the market to reduce gapping and ensure that correlations are broadly maintained so that market vehicles act in fairly predictable ways. though this is much more true of index stocks - which impact overall index performance - than say microcaps

to do that they run algo systems that are generally meant to be risk neutral - ie the machines are programmed to sell into highly overbought technicals and buy into highly oversold - so they are constantly retopping their liquidity to keep fulfilling the function

so when a stock runs into a highly overbought short term condition like MYL did yesterday - typically when its a long way above its bollinger ranges - the machines start spewing out liquidity

thats why - even if fundamentals suggest a $100m mkt cap stock is massively undervalued - they dont often go +20% in a given day - but it depends on the chart, stock size, whether its part of an index etc

this typically caps what a sp will do in a given day. it takes huge rocket powered buying to push through that in one trading session

even then it typically resolves itself in a brief pullback a few days later - as the bollingers reset

the machines adjust for such big moves - the technicals reset and the machines adjust their trigger points for selling and buying

the market makers are almost entirely US owned - Citadel, State Street etc - that is how they control the global stock market.

these behaviours are why say ASX trades with moderate to high correlation with US market - even when it may have completely separate intrinsic drivers

anyway - thats why i was saying to buy MYL into the close 7.7-8c. because i expected the market maker machines to be feeding liquidity into that overbought condition.

basically if you screech into a big upcurve you rarely slingshot straight north in one day. the market makers ensure you have to take the bend

hence 'limit up'

but the more straight up a stock went day prior - the more bollinger ranges reset to be similarly 'straight up' the next day

so the rate of increase can actually inflect higher and higher session after session if a stock's valuation support has massively shifted in some way - or like here where the market has flipped cold to overt hot in a very short time