It's so quiet here - is fear gripping you?

[Gringotts Bank]

You know how you like to draw your random lines all over charts. Well this time a real important one got taken out.

Now add in China and you have a real explainable reason why all the markets got smashed 2 seconds after the news.

Even when you're wrong, you're quite sure you're right! It's a rare talent - you and Julia Gillard! :

 

[Trembling Hand]

Even when you're wrong, you're quite sure you're right! It's a rare talent - you and Julia Gillard! :

No worries mate one day you might stop being lazy and learn what moves markets. Then ya can even start trading them with money if your smart enough...... till then.................. :

 

[Gringotts Bank]

No worries mate one day you might stop being lazy and learn what moves markets. Then ya can even start trading them with money if your smart enough...... till then.................. :

You sound extra pleased with yourself today! Head swell factor: 8.5. You did top out at a 10 the other day but I forgot to mention it. :

 

[Gringotts Bank]

skc, did you read the bit about where I said if the markets were in a very bouyant phase, that such a report from China would be shrugged off? Hence news doesn't move markets, sentiment does.

 

[skc]

skc, did you read the bit about where I said if the markets were in a very bouyant phase, that such a report from China would be shrugged off? Hence news doesn't move markets, sentiment does.

Where do you think market sentiment comes from?

1. An assessment of information available (past, present and forward looking).

2. Gut feel.

 

[Gringotts Bank]

Where do you think market sentiment comes from?

1. An assessment of information available (past, present and forward looking).

2. Gut feel.

Sentiment = gut feel (Latin, sentio - "I feel").

It comes from an assessment of information available (past, present and forward looking), mainly price action I expect.

How does this change anything?

 

[skyQuake]

Sentiment = gut feel (Latin, sentio - "I feel").

It comes from an assessment of information available (past, present and forward looking), mainly price action I expect.

How does this change anything?

You dont need sentiment to move the markets. A fund would assess information available, but not sentiment. An algo would not have sentiment.

Personally I think its just semantics at play here.

 

[skc]

Sentiment = gut feel (Latin, sentio - "I feel").

It comes from an assessment of information available (past, present and forward looking), mainly price action I expect.

How does this change anything?

Let's do some algebra.

Sentiment = an assessment of information available.

News = information.

Substitute these words into your statement below gives...

Hence news doesn't move markets, sentiment does.

Hence information doesn't move market, assessment of information available does.

So like SkyQ says it's just semantics.

 

[Gringotts Bank]

Let's do some algebra.

Sentiment = an assessment of information available.

News = information.

Substitute these words into your statement below gives...



Hence information doesn't move market, assessment of information available does.

So like SkyQ says it's just semantics.

Maybe it is. The point I was trying to make is that information in itself will not move any market until certain institutions have filtered it through a whole range of beliefs/expectations/knowledge. So the output (buy or sell) won't be a *direct* result of information, but more a result of the way the information is perceived. This perception is very different between different people. Fund x hears the news and decides to liquidate everything. Fund Y hears the news and decides to buy on weakness.

Anyway, thank you for the respectful conversation. You may disagree, or even prove me wrong with your next post. No problem with that.

 

[Trembling Hand]

Maybe it is. The point I was trying to make is that information in itself will not move any market until certain institutions have filtered it through a whole range of beliefs/expectations/knowledge. So the output (buy or sell) won't be a *direct* result of information, but more a result of the way the information is perceived.

I disagree. Yesterday China news was a great example. There has been aggressive selling in all China markets for two months. The last week what selling he/they have done has quickly been absorbed. Not so yesterday. Bad news = smash and smash hard because he/they knew they would get away with it on a bad news day.

GB thats why you have squawk boxes on trading floors- actually three different services. It enable you to exercise your trading ideas. Take opportunity in an instant when they show up. Most traders base there day/week around news releases and how to game them.

 

[odds-on]

Let's do some algebra.

Sentiment = an assessment of information available.

News = information.

Substitute these words into your statement below gives...



Hence information doesn't move market, assessment of information available does.

So like SkyQ says it's just semantics.

The first issue with the "information" provided by the news is that it is produced by the mainstream media and the mainstream media all write alike. The second issue with the "information" provided by the news is whether or not it is actually correct.

I think it is very important to underweight news involving the results of complex economic/political/social interactions, especially if experts and statistics are involved. On the flipside, I think it is important to overweight news that means a change in state for a business (e.g. merger, CEO resignation, selling of assets).

Cheers