Market News to Influence our Profit-Making Decisions! “Buy the Rumor, Sell the News"
Market news is the communication of selected information on current events which is presented by print, broadcast, Internet, or word of mouth to a third party or mass audience.
It is thought that news developed as a special use of the plural form of new in the 14th century. In Middle English, the equivalent word was newes, like the French nouvelles and the German neues.
Before the invention of newspapers in the early 17th century, official government bulletins and edicts were circulated at times in some centralized empires.
The first documented use of an organized courier service for the diffusion of written documents is in Egypt, where Pharaohs used couriers for the diffusion of their decrees in the territory of the State (2400 BC). This practice almost certainly has roots in the much older practice of oral messaging and may have been built on a pre-existing infrastructure.
In Ancient Rome, Acta Diurna, or government announcement bulletins, were made public by Julius Caesar. They were carved in metal or stone and posted in public places.
In China, early government-produced news sheets, called tipao, circulated among court officials during the late Han dynasty (second and third centuries AD). Between 713 and 734, the Kaiyuan Za Bao ("Bulletin of the Court") of the Chinese Tang Dynasty published government news; it was handwritten on silk and read by government officials. In 1582 there was the first reference to privately published newssheets in Beijing, during the late Ming Dynasty.
In Early modern Europe, increased cross-border interaction created a rising need for information which was met by concise handwritten newssheets. In 1556, the government of Venice first published the monthly Notizie scritte, which cost one gazetta.
Etiquette of News Reporting
News organizations are often expected to aim for objectivity; reporters claim to try to cover all sides of an issue without bias, as compared to commentators or analysts, who provide opinion or personal point-of-view.
Newsworthiness is defined as a subject having sufficient relevance to the public or a special audience to warrant press attention or coverage.
In some countries and at some points in history, what news media and the public have considered "newsworthy" has met different definitions, such as the notion of news values.
With the advent of the Digital Age everything we thought we once knew about journalism needs to be rethought. Today the work of journalism can be done from anywhere and done well. It requires no more than a reporter and a laptop.
There are many considerations when market news is involved:-
1. The reader and writer interpretation,
2. The distinction and reliance among tweet, blog post, newspaper story, magazine article, and book.
3. Professional or amateur input to market news items and a variety of “pro-am” relationships which has emerged.
4. The boundaries delineating for-profit, public, and non-profit media have become misconstrued at times, and the cooperation across these models of financing has developed badly.
5. Within commercial news organizations, the line between the news room and the business office is questionable,
6. The line between old media and new media has blurred, practically beyond recognition.
These alterations inevitably have fundamental ramifications for the contemporary ecology of news. The boundaries of journalism, which just a few years ago seemed relatively clear, and permanent, have become less distinct, while potentially the foundation of progress even as it is the source of risk, has given rise to a new set of journalistic principles and practices to survive the never-ending change encountered with modern technology!
It is indeed complex, but it seems to be the future.
News Trading
Trading decisions based on news developments are nothing new. Whether the market-moving news arrives by boat, carrier pigeon or Blackberry, traders have always been eager to be the first to exploit and act on information that may impact a given market.
Yet now news is only new for a fraction of a second. Algorithms and rules-based engines filter text as it appears online, identify its underlying meaning, assess its importance and then - when warranted - execute trades based on it. All this occurs in a matter of milliseconds. Ideally, a thousandth or two of a second before competing traders' algorithms do so.
At the same time, the definition of market news as it applies to trading markets is changing as well. In the age of Facebook, Twitter and social networks "we are seeing many new and different kinds of data sources that can be analyzed and mined for tradable insights," which in turn can be turned into machine-readable text or numbers and assessed for value by trading algorithms.
News Trader
From the development of news to market news, we have the emergence of the “news trader.”
A news trader is a trader or investor who makes trading or investing decisions based on market news announcements. Economic reports and other news can have a short-lived affect on particular markets. News traders try to profit by predicting how a market will respond to particular news.
The old saying “buy the rumor, sell the news” means that rumors have one effect on a particular trading instrument’s price movement, and news can have an opposite effect.
News traders rely on short-term reactions to market news to drive the market in a particular direction. News traders can look at historical data to predict how future news can affect prices. By becoming familiar with certain markets, news traders can make a guess as to whether a stock or other trading instrument will increase or decrease in price following a market news report. Often these price moves happen within an extremely short period of time following the news; therefore, news traders must be quick to respond if they hope to capture profits. This also means that news traders must be one of the first to receive breaking market news.
This is a collection of important market news items, from economic, stock, volatility, world influences, to articles, periodicals, etc., that have a significant influence on the market today, which in turn influences our trading decisions and the bottom line -- profit!
The latest innovation is the Mini Options, which will permit investors to trade options on 10-share lots rather than the customary 100 shares. This development is a great cog-in-the-wheel of success and profit for the investor!
The stock market resilience, particularly the S&P 500 index, may continue as it has a decent chance of stringing together its fifth consecutive positive month in historically-bullish March despite the “fiscal cliff” drama, the likely implementation of sequestration and new trouble in Europe.
January was clearly a bullish month for stocks -- but how does this compare with previous years with hot starts? What might the stock market expectations be for investors in 2013?
The stock market is impressive -- given the overwhelming amount of bearish sentiment – low investor expectations -- shrouding the market. Also observed in this article, is a notable shift in the VIX options pits on Friday and the effect this will have on short-term bullish investors, as well as the significance of the SPX levels.
The market bulls proved victorious yet again last week, as encouraging developments in Europe overshadowed lackluster earnings from the tech sector. And now, investors' appetite for risk could increase even more this week, should global central-bank moves pan out in the bulls' favor.
Several indicators are discussed which should offer the bulls some uplifting glimpse of the future. Now that July options expiration is behind us, it is possible that stocks can finally gather enough positive momentum to tackle looming resistance levels.
As options expiration approaches, expectations on Wall Street and technical levels being on the radar, particularly a low VIX, provides an opportunity for the bulls to benefit!
This article highlights the major support and resistance levels to watch -- including that troublesome double-low for the S&P 500 Index (SPX). Also, as we head into June expiration week, trying to determine if heavy put open interest on the SPDR S&P 500 ETF (SPY) will play havoc with traders' bullish aspirations, is discussed.
Last week was quite a downer, but all may not be lost for the bulls, however, as some remaining technical areas, such as the breakeven levels, that could serve as significant support against an increasingly skeptical sentiment backdrop, are still apparent.
In this analysis, strategies are examined to determine which ones would have been more profitable so far in 2012. Considering options costs and the returns generated from cheap or expensive moves presents some very interesting results.
Last week, the SPX had pulled back to its 320-day moving average, in the 1,291 zone. Since the late 1990’s this technical analysis has proven its significance as a support and resistance area on multiple occasions. Crossovers above and below this trendline have proven to be pretty effective buy and sell signals, and this article goes into detail to outline the significance of this situation.
It is essential to understand the implications of last week’s fall, particularly looking at the effects that delta-hedging had on the market!
By highlighting the key chart levels to watch this week for the Russell 2000 Index (RUT), Standard & Poor's 500 Index (SPX), and PowerShares QQQ ETF (Nasdaq: QQQ) helps investors to realize the pitfalls and potential profits to be made and take action to implement appropriate strategies.
With Wall Street heading into a seasonally weak period, and the conditions of last week fresh in investors’ minds, panic could be a major concern for the market. Even though the technical indicators provide an outlook that remains cloudy over the near term, there are still many aspects of the market in good shape, and there is encouragement from the growing buzz over bearish chart patterns, therefore, stocks could be back to a move forward in the week ahead.
Since the CBOE Market Volatility Index (VIX) is "cheap," as well as other various VIX products -- such as VIX options – at this present time, therefore, making ideal instruments for hedging equity portfolios.
While any one of the headlines in the past couple of weeks, trying to invoke fear into the investor, might have sparked a selling spree in the not-so-distant past, this article breaks down a few notable data points that help to explain the market's growing resilience. But while Europe may finally be priced in -- at least, for now – it is important to note several looming technical levels that could keep a lid on stocks going forward.
The bullish risk factor is under-scored by investor anxiety as observed by the current sentiment landscape. There has been rising expectations for a correction of painful proportions therefore a survey of small caps as a barometer for the broader market is in order.
Investors are becoming more market risk aware after the last several years of uncertainty in the stock market! This article discusses this issue as well as explores the round numbers situation for the SPX and MID. Also, a look ahead to the start of first-quarter earnings season, where there appears to be evidence that the choppy trading range could eventually resolve itself to the upside.
Even though a bull market is apparent -- three years and more than 600 SPX points later -- retail investors still aren't buying it! This article looks at three major signs that skepticism is mounting, despite the market's technical feats.
-February 18, 2012
Most traders today still use stock options as pure speculation and don't realize the true potential of stock options. Now that we've reached a period that offers a low barrier to entry, it makes perfect sense to use options to their full advantage. Commissions are low and products are highly liquid. If you use the appropriate products, there is truly no edge now for the market makers.
-February 19, 2012
A stock pullback provides buying opportunities and this is evident so-far in 2012. The Dow Jones Industrial Average (DJIA) and Nasdaq Composite (COMP) have both rallied their way to new multi-year highs although several other equity benchmarks -- including the S&P 500 Index (SPX) -- finished the week just shy of their 2011 highs. Portfolio insurance became cheaper this past week, as SPX historical volatility was flat, while the CBOE Market Volatility Index (VIX - 17.78) decreased 14%, closing the gap between implied and historical volatility on the SPX.
October 28, 2011
This market indicator – Order Backlogs -- is definitely sending out strong signals to buy….. and the market is certainly following this theme!
The earnings calendar for this week, with 932 firms scheduled to report. Also some potential positive or negative surprises for several companies are outlined.
October 18
The "Fear Gauges" marched higher yesterday, particularly volatility-linked exchange traded funds along with the CBOE Volatility Index. TVIX was the biggest gainer with 17%.
Before selling all your stocks and sealing the hatch on your bunker, stop, take a deep breath, and put this week’s pullback into perspective. Profit from the bad news – good news syndrome….how???
”Success is simple. Do what's right, the right way, at the right time.”
Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.