Two weeks ago I wrote a quick post discussing the basics of the Level 2 and introduced the term “tape reading.” In this post, I wanted to share a live video of the tape and share with you how I actually used the tape in a recent trade (SGYP).

The first video (parts 1 and 2) is of $AER back on 6/4/15. In part 1, I just wanted to highlight 1) How $49 held the bid on the open; 2) Once $49 dropped, the speed of the time and sales (prints) increased; 3) The retest of the $49 level, specifically how the offer couldn’t hold above $49. In part 2 (of the same video), I wanted to highlight how a huge bid steps up at $49 right before it drops, and you then see that huge bid decrement or decrease, which is simply that large order being filled (a large bid decrementing is bearish and a large offer decrementing is bullish). Sorry in advance for all the “umms” and low volume; I’ll try to improve next time 🙂

The next video is of $SGYP on 6/17 after it had gaped up over 50 percent. I actually traded this stock, so I felt it would be a really good example to share. By the way, the stock closed above $9.00 today 😉

$SGYP above $7. $7.10 seller currently. #Intraday #TapeReading

— Jake Huska (@MarketPicker) Jun. 17 at 11:51 AM

$SGYP testing premarket highs. #Intraday — Jake Huska (@MarketPicker) Jun. 17 at 01:08 PM

Sold most of $SGYP long into $8 here. #Intraday

— Jake Huska (@MarketPicker) Jun. 17 at 02:55 PM

Decided to get flat last bit of $SGYP long on the $8.50 failure. Probably sees $9… — Jake Huska (@MarketPicker) Jun. 18 at 11:42 AM

Yep. “@MarketPicker: Decided to get flat last bit of $SGYP long on the $8.50 failure. Probably sees $9…”

— Jake Huska (@MarketPicker) Jun. 18 at 03:39 PM

 

I hope you found this post helpful. Please let me know if you have any questions or comments.

Jake

Reading the Tape: Video Examples