Ursa Majoris Posted January 20, 2010 Share Posted January 20, 2010 Stocks and currencies don't trade off news - any correlation is coincidence. They trade off nothing but news. This is one of the main criticisms of the way the system is set up - it is so short term, it responds to every piddling little thing that happens or doesn't happen and all of them head in the same direction at once, like a bunch of sheep. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted January 20, 2010 Share Posted January 20, 2010 What China rumors? the gvt told banks to stop lending for the rest of the month. unsustainable growth over there. Quote Link to comment Share on other sites More sharing options...
Avernus Posted January 20, 2010 Share Posted January 20, 2010 the gvt told banks to stop lending for the rest of the month. unsustainable growth over there. also China is manipulating the dollars value so they can buy Gold at $1000 per oz from the IMF... China loves manipulating currencies... Quote Link to comment Share on other sites More sharing options...
Brentastic Posted January 20, 2010 Share Posted January 20, 2010 They trade off nothing but news. This is one of the main criticisms of the way the system is set up - it is so short term, it responds to every piddling little thing that happens or doesn't happen and all of them head in the same direction at once, like a bunch of sheep. Most people agree with your assesment but it's actually not correct. Who am I though? Quote Link to comment Share on other sites More sharing options...
CaP'N GRuNGe Posted January 20, 2010 Share Posted January 20, 2010 Most people agree with your assesment but it's actually not correct. Who am I though? Wile E. Coyote, super genius. Quote Link to comment Share on other sites More sharing options...
bpwallace49 Posted January 20, 2010 Share Posted January 20, 2010 Who am I though? You are brentastic! On youtube! nufced . . . . Seriously I love reading these threads as my profession is not in the trading/economics field . . . Quote Link to comment Share on other sites More sharing options...
Big John Posted January 20, 2010 Share Posted January 20, 2010 Who am I though? Pebbles Flintstone Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted January 20, 2010 Share Posted January 20, 2010 Pebbles Flintstone Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted January 20, 2010 Share Posted January 20, 2010 Pebbles Flintstone Wow, I was actually starting to take what Brent was saying seriously, and then I see that picture. Quote Link to comment Share on other sites More sharing options...
bpwallace49 Posted January 20, 2010 Share Posted January 20, 2010 Pebbles Flintstone wow . . . just wow Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted January 20, 2010 Share Posted January 20, 2010 They trade off nothing but news. This is one of the main criticisms of the way the system is set up - it is so short term, it responds to every piddling little thing that happens or doesn't happen and all of them head in the same direction at once, like a bunch of sheep. Now I agree with you that the short term profit outlook of a company is a bad way to view things, and to determine things such as bonuses. However, with regard to trading, you have to trade based on the news, and how news is going to affect a company. I can guarantee you that my company would be 20% more profitable in 2011 if health care reform fails in the next 3 months, or if health care reform that does not hurt hospitals and doctors is passed in the next 3 months. That is solely based on the amount of medical work we do, and how that work is all on hold as everyone is holding their breath waiting to see if the government is going to screw everything up. Quote Link to comment Share on other sites More sharing options...
westvirginia Posted January 20, 2010 Share Posted January 20, 2010 Pebbles Flintstone You hadn't smoked any that day, had you Brent? Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted January 20, 2010 Share Posted January 20, 2010 to say stocks do not trade off of news is wrong. ive made and lost oodles of money on news. Quote Link to comment Share on other sites More sharing options...
Brentastic Posted January 20, 2010 Share Posted January 20, 2010 Pebbles Flintstone That's the best photo ever, especially given Whomper's 'Pebbles Flintstone' title - priceless!! Quote Link to comment Share on other sites More sharing options...
Brentastic Posted January 20, 2010 Share Posted January 20, 2010 to say stocks do not trade off of news is wrong. ive made and lost oodles of money on news. I think Ralph Nelson Elliott described it best: Wall Street has an adage that 'news fits the market.' This means that, instead of the news 'making the market', the market forsees and appraises the importance of the underlying forces that later may become news. At best, news is the tardy recognition of forces that have already been at work for some time and is startling only to those unaware of the trend. The forces that cause market trends have their origin in nature and human behavior and can be measured in various ways. Forces travel in waves as demonstrated by Galileo, Newton and other scientists. These forces can be computed and forecast with considerable accuracy by comparing the structure and extent of the waves. The futility in relying on anyone's ability to interpret the value of any single news item in terms of the stock market has long been recognized by experienced and successful traders. No single news item or series of developments can be regarded as the underlying cause of any sustained trend. In fact, over a long period of time the same events have had widely different effects, because trend conditions were dissimilar. You can read more here: http://books.google.com/books?id=y7gEG4PQI...;q=&f=false Quote Link to comment Share on other sites More sharing options...
cre8tiff Posted January 20, 2010 Share Posted January 20, 2010 It's sorta ironic that we are still commenting on a post titled S&P 400 in six months? 8 months after it was started, with the S&P @ 1,138 ... Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted January 20, 2010 Share Posted January 20, 2010 Now I agree with you that the short term profit outlook of a company is a bad way to view things, and to determine things such as bonuses. However, with regard to trading, you have to trade based on the news, and how news is going to affect a company. I can guarantee you that my company would be 20% more profitable in 2011 if health care reform fails in the next 3 months, or if health care reform that does not hurt hospitals and doctors is passed in the next 3 months. That is solely based on the amount of medical work we do, and how that work is all on hold as everyone is holding their breath waiting to see if the government is going to screw everything up. I'm commenting on the market itself as opposed to individual companies. I contend that it reacts way too wildly to news that matters little in the greater scheme of things and this hysteria is brought about by the prevalence of the short-term - even immediate - view. I read the business section of the paper every day and also pay attention to the various elements of my 401k and other investments. None of this brings me to genius level, or even knowledgeable level in terms of being a financial or economic whiz. What it does do is show me that virtually everyone in the market responds the same way to the same news, market ups and downs are based on things that are completely irrelevant in the longer term and that day's news affects all companies regardless of industry and/or general company health. Traders, analysts and all the rest of the paper-pushers are really nothing more than one of those schools of fish you see on NGTV, all turning this way and that simultaneously as if they were just one entity. Quote Link to comment Share on other sites More sharing options...
Brentastic Posted January 20, 2010 Share Posted January 20, 2010 I'm commenting on the market itself as opposed to individual companies. I contend that it reacts way too wildly to news that matters little in the greater scheme of things and this hysteria is brought about by the prevalence of the short-term - even immediate - view. I read the business section of the paper every day and also pay attention to the various elements of my 401k and other investments. None of this brings me to genius level, or even knowledgeable level in terms of being a financial or economic whiz. What it does do is show me that virtually everyone in the market responds the same way to the same news, market ups and downs are based on things that are completely irrelevant in the longer term and that day's news affects all companies regardless of industry and/or general company health. Traders, analysts and all the rest of the paper-pushers are really nothing more than one of those schools of fish you see on NGTV, all turning this way and that simultaneously as if they were just one entity. The bolded part really shows your lack of knowledge on the subject, which is fine since you admit to know little on the subject. But just to set you straight, Day-traders, in a general sense, do follow the pack because they have to follow the day's trend (you can't make money fading the trend when you have to close out your positions by the day's closing). Long term traders, some perhaps, certainly not all. Analysts don't 'push paper', they analyze investment opportunities and create reports for their CEOs etc... - depending on the firm, some analysts may be followers, others may think outside the box. There's no given direction analysts gravitate towards, again, depending on who they work for. The big firms (GS) probably are fish since they have an underlying motive for writing financial reports and are most likely directed to give a certain 'rating' on a given equity. This entire thread I've predicted everything opposite of these schools of fish you reference, while all your responses have been exactly what all the other schools of fish claim to know. I guess I fail to see the point of your post above, unless you're just pointing out that you are part of the flock? Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted January 20, 2010 Share Posted January 20, 2010 I'm commenting on the market itself as opposed to individual companies. I contend that it reacts way too wildly to news that matters little in the greater scheme of things and this hysteria is brought about by the prevalence of the short-term - even immediate - view. I read the business section of the paper every day and also pay attention to the various elements of my 401k and other investments. None of this brings me to genius level, or even knowledgeable level in terms of being a financial or economic whiz. What it does do is show me that virtually everyone in the market responds the same way to the same news, market ups and downs are based on things that are completely irrelevant in the longer term and that day's news affects all companies regardless of industry and/or general company health. Traders, analysts and all the rest of the paper-pushers are really nothing more than one of those schools of fish you see on NGTV, all turning this way and that simultaneously as if they were just one entity. See, that is just it. The market is nothing but a group of companies. The Dow, Nasdaq, etc... will rise and fall based on the new in sectors. Yesterday the Dow went up, primarily on the back of the health care sector, today it goes down based on other sectors. News affects different sectors differently. There is nothing wrong with sectors and thus the market reacting to the news, in fact I would say there would be something wrong if they didn't. Quote Link to comment Share on other sites More sharing options...
dmarc117 Posted January 20, 2010 Share Posted January 20, 2010 I think Ralph Nelson Elliott described it best: You can read more here: http://books.google.com/books?id=y7gEG4PQI...;q=&f=false so i guess bidu gap opening up $60 last week after goog came out and said they might leave china was a trend?? then being down $40 the other day when goog came out and said they may stay another trend??? no, bidu moved cause of the news about goog's status in china. Quote Link to comment Share on other sites More sharing options...
Brentastic Posted January 21, 2010 Share Posted January 21, 2010 You hadn't smoked any that day, had you Brent? Who, me? Nah Quote Link to comment Share on other sites More sharing options...
Brentastic Posted January 21, 2010 Share Posted January 21, 2010 so i guess bidu gap opening up $60 last week after goog came out and said they might leave china was a trend?? then being down $40 the other day when goog came out and said they may stay another trend??? no, bidu moved cause of the news about goog's status in china. Sure, the market trades based on news....until it doesn't. So, if the market chooses when it decides to move or not based on news, does it really follow the news? That's not to say stocks can't or won't move because of news either, in your example the bidu clearly moved because of news - but in the general sense, the market does not move because of news. In fact, in a general sense and as a market whole sense, news lags the market and follows the exact same progression when it does. Part of the problem here is that I'm viewing the market as one large organism and you're referencing individual stocks. However, as evidenced by the market tanking from fall 07-Feb 09 and the subsequent rally from March 09 until now, individual stocks move with the overall market trend (for the most part). What this all means is that in a bull market, you really can't pick a bad stock and vice versa - which explains why everyone's 401k tanked during the 07-09 drop and everyone's 401k rebounded during the past 10 month rally - talk about sheep! In order to be a successful trader (succeeding in all market conditions and not just being part of the herd), you must view the market as one large organsim and not individual stocks and then you must be able to identify large market trend reversals. You said yourself that you've made AND lost tons of money trading off news - if you approached trading as getting on board when the trend reversal begins, then the small daily fluctuations won't matter at all. Quote Link to comment Share on other sites More sharing options...
bpwallace49 Posted January 21, 2010 Share Posted January 21, 2010 Sure, the market trades based on news....until it doesn't. So, if the market chooses when it decides to move or not based on news, does it really follow the news? duuuuude. You just totally blew my mind . . . . . Quote Link to comment Share on other sites More sharing options...
Brentastic Posted January 21, 2010 Share Posted January 21, 2010 duuuuude. You just totally blew my mind . . . . . Quote Link to comment Share on other sites More sharing options...
Avernus Posted January 21, 2010 Share Posted January 21, 2010 actually I'm not sure if anyone has noticed but a lot of stocks have done well in the past 6 months while having nothing but bad news.... there's a lot of market manipulation going on right now especially with banks... Quote Link to comment Share on other sites More sharing options...
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