A few days ago, I was looking at the 1 Day chart for a particular NASDAQ stock, a medium sized company (15 B cap) that is well known, but not something that ever moves the market as a whole (unlike IBM lately, for example).

Anyway, I added the NASDAQ Index for the day to the same chart, and to my surprise, the curves matched very closely.

What I mean is that every time the NASDAQ went down a slight amount, the stock went down and vice versa.

For example, there was a particular ten minute dip in the NASDAQ, and a ten minute dip in the stock at the same time. Several spikes in the NASDAQ corresponded to spikes in the stock at the same time. Slow up and down trends were also mirrored.

I happen to know a lot about the business of this particular stock, and there were absolutely no news items in this sector that day (nor the day before). (I'm not identifying the actual stock, in order to avoid the typical diversion of the thread into a discussion of the product or the company.)

So, clearly the stock was not influencing the NASDAQ , so either the minute changes in the NASDAQ were somehow affecting the stock price directly on a minute-to-minute basis, OR some other factor was affecting both the NASDAQ and the stock price directly.

My hunch is that something about the order execution process (which I do not know much about) might be causing this.

Any insights would be of interest, thanks !

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