CTSH on 10/02/2004

[clylbw]

Hi,

Wonder if someone did CTSH today.

I was unable to watch the market until almost the end, and I wonder what actually happened during that five long spikes of it today (please refer to the attached chart).

The first one happened just before 10:30 am EST. My ex post research seems to indicate that this was caused by the news of the issuing of its conference call guidance, and confirmed by high volume. It looks like a 'genuine' spike.

However, there the remaining 4 spikes, 2 just before and 2 after 3:00 pm EST, seemed to have come from nowhere, with neither the cause of news nor the confirmation of volume. They looks like 'fakes' to me (sorry I do not know the correct terms for them, but hopefully I have made myself clear... ).

What I would like to know is:

1. Did any TA indicators or the Level II information signal about any of the spikes beforehand?

2. Is it possible to tell those 'genuine' spike from the 'fakes'? If so, how?

3. How can I know more about the cause, the signals and the implications of spikes?

So, can you please advise me about the spikes of CTSH today, or about the general circumstances regarding the spikes? Thank you indeed.

 

[clylbw]

For today's CTSH.

 

[Skimbleshanks]

The following is the 5 minute chart for CTSH today. The spikes are duff data, and Qcharts prints them in yellow. Not all data providers correct the data (myTrack doesn't, for example), so they were just mistakes, not proper spikes.

 

[First Wave]

You have bad data, there were no spikes at that time indicated.
Your data service should clean that up later in the day.

 

[clylbw]

Hi Skim, thanks for the chart.

Hi First Wave, sorry I have not made myself clear. By the first spike, I meant the long five-minute bar at around 10:25 am EST as in both my and Skim's charts. The four other spikes are those with yellow 'tails' as also indicated by the charts.

It seems to me that these five belonged to two kinds. The first one was 'genuine', while the other four were 'fakes'. I wonder whether those four had been generated by market makers for some specific purposes.

The problem is, I noticed in other occasions that there were similar, or so it seemed to me at least, activities in the Level II before both kinds of spikes. However, the first kind turned out to be genuine clashes, while the second kind was no more than fakes.

What I would like to ask is, how to tell then apart beforehand with the information in Level II or other tools. I also would like to know why and how the fakes have occurred. Since I was not watching the market when those spikes happened, I wonder what happened at that time.

Hope it is clear enough now. Thank you.

 

[Skimbleshanks]

The easy answer is to look at the volume.

Volume accompanied the first spike down, but didn't on the others.

I find it good to have a quick look to see what level of volume is 'significant' - in this case, anything above 50,000 over a 5 minute bar. Then if you drop to a one minute chart you can quickly see whether volume is accompanying any rapid movement or not.

 

[clylbw]

Thanks Skim.