[CANSLIM] Microcap Question

From: "Rob Miller" <rmiller2@carolina.rr.com>
Subject: [CANSLIM] Microcap Question
Date: Tue, 12 Mar 2002 10:20:25 -0500

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Tom, I'm hoping you can answer this question for me since microcaps are =
your main interest.  I've not dealt with them much in the past.  I've =
been following a few microcaps (<$80 million market cap) and I'm =
confused about the movements in the bid/ask prices.  Assume the spread =
is 7 X 7.15 with most trades, small lots, split evenly between those =
hitting the bid and those taking the ask.  However, the action is slow.  =
Then, the bid suddenly drops to 6.90, 6.85, 6.80, 6.75.  Several trades =
go off at 6.75 over just a few seconds, then the bid jumps back up to =
7.00, at which point the trading becomes slow again.  The ask never =
changes.  In some cases, trades go off below the bid price. =20

I can understand when someone withdraws their bid causing the bid to =
drop, but it seems strange that several trades go off at what appears to =
be far below the prevailing market price.  No trades, bid drops for a =
few seconds, a few quick trades, then bid goes back up.  What causes =
this?  It seems to scripted to be accidental.   =20

Thanks,
Rob=20

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<DIV><FONT face=3DArial size=3D2>Tom, I'm hoping you can answer this =
question for me=20
since microcaps are your main interest.&nbsp; I've not dealt with them =
much in=20
the past.&nbsp; I've been following a few microcaps (&lt;$80 million =
market cap)=20
and I'm confused about the movements in the bid/ask prices.&nbsp; Assume =

the&nbsp;spread is 7 X 7.15 with most trades, small lots, split evenly =
between=20
those hitting the bid and those taking the ask.&nbsp; However, the =
action is=20
slow.&nbsp; Then, the bid suddenly drops to 6.90, 6.85, 6.80, =
6.75.&nbsp;=20
Several trades go off at 6.75 over just a few seconds, then the bid =
jumps back=20
up to 7.00, at which point the trading becomes slow again.&nbsp; The ask =
never=20
changes.&nbsp; In some cases, trades go off below the bid price.&nbsp;=20
</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>I can understand when someone withdraws =
their bid=20
causing the bid to drop, but it seems strange that several trades go =
off&nbsp;at=20
what appears to be far below the prevailing market price.&nbsp;&nbsp;No =
trades,=20
bid drops&nbsp;for a few seconds, a few quick trades, then&nbsp;bid goes =
back=20
up.&nbsp; What causes this?&nbsp; It seems to scripted to be=20
accidental.&nbsp;&nbsp;&nbsp; </FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial size=3D2>Thanks,</FONT></DIV>
<DIV><FONT face=3DArial size=3D2>Rob</FONT>&nbsp;</DIV></BODY></HTML>

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