Trading Analysis - 19th March 2019

Alfacomp

19 March 2019

Following a clear attack of the verbally incontinent a significant section of the LSE community has requested that I undertake a trade analysis today. More than happy to oblige.

Monday, 19th Mar 2019


The very large excess of sells before 9am is rather notable:- 


The patterns of large sells are also rather notable - 8 Sells larger than 30K in the first 45 minutes of trading and not a single Buy larger than 30K. This is highly unusual especially given the generally very low volumes experienced in the last 2-3 weeks.

The 100K sells were both reported 1 hour late, and interestingly the 40K trade was reported a few seconds AFTER the three 8:39:14 trades which it preceded (it would seem a rather large coincidence for all three of these trades to have independently arrived at exactly the same time, so I suspect that they were delayed and grouped together to go through before the 40K Sell - all rather strange but not in itself a cause for concern.)

This particular 40K Sell came hot on the heels of 2x closely spaced 30K Sells (this is the Nominal Market Size for which MMs must entertain RSP trades immediately) and as such is always a highly suspicious pattern. As well as closely spaced (within the minute) pairs of 30K Sells observed before 9AM there are also multiple instances of c. £10K Sells (c. 28K shares sold) - these also arouse a degree of interested conjecture. 

As a result of 400K (2x100K, 2x50K, 1x40K, 2x30K) of Sells from this cohort of trades the nett trade position fell to almost minus 500K before 9AM. This again is highly unusual and the suppression in Bid and Ask of only 0.5p at this time is remarkably small given this situation. All this suggests that the MMs would be uncomfortable taking the price any lower lest they end up selling large numbers of shares at prices they are never going to be able to procure them for. The 400K of Sells and the rather obvious subsequent trolling all point to these being short sells (i.e. shares sold that will have to be bought back later.)

A number of LTH's, including myself and Fatbanker, were able to benefit from this temporary largesse and at the end of the day Buys totalled 1.31M vs Sells of 1.35M - yet again we find the MMs running a remarkably neutral book. As explained previously this period of balanced trading is highly suggestive that they are prudently avoiding selling shares short ahead of potentially transformative news.

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