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Don, I basically agree that reaction to news is more important (or at least
as important ) than the news itself. However, I have noticed on many
occassions that looking at a chart prior to a major news event the
chart(whatever the entity) indicated that if it was on a sell negative news
came out and the news confirmed the chart. The reverse for positive
news.Even if this is not always the case, a glance at the chart of the
entity you are trading will be of help or at least increase the odds in your
favor when making a decision .The "Markets" seem to take on a mind of their
own . The participants individually don't know but when the crowd becomes
one ,it forms the mind of the market , and this mind knows all that is"
knowable"
Dom
----- Original Message -----
From: "Don Ewers" <dbewers@xxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxx>
Sent: Sunday, December 10, 2000 11:07 AM
Subject: Re: [RT] Re: Trading Events
> Dan,
> Sure it really quite simple a simple trade to understand and not my own (a
> fellow trader shared it with me). Basically it is the acknowledgement
that
> the "news or trading event" is already discounted in the price of the
> commodity. A reaction to the news occurs, but then the reaction quickly
> fails. Grain traders use it frequently on a grain report day but the
bonds
> and SP's with the current volatility are other good places to watch for "a
> news reversal trade".
>
> It is also discussed in the Raschke/Conners book "Street Smarts" I think,
> which may have been the trades origin, or at least documented.
>
> Basically when a market moving event is about to happen you note the price
> of the underlying commodity, then after the commodity reacts to the event
,
> lets say up for example, you place a sell stop at the price the commodity
> was at "before the event". If the commodity trades back down to that price
> you go short. They actually happen quite frequently.
>
> Here is an example, it is widely expected (or maybe not) that the crop
> report might show less yield, smaller acreage, larger exports whatever for
> soybeans. The price prior to the report (the previous day because crop
> reports are at 7:30 am as I recall) had a range of $5.05 to $5.10 closing
at
> $5.08. The report comes out and beans when they open at 9:30 am gap or
trade
> up to $5.21. At that point you would place a sell order at $5.10 and if
> beans trade back into the previous days range you go short with a stop at
> the gap high or a money stop whichever works with the risk you wish to
take.
> Exit the trade (hopefully profitably) using any number of profit taking
> techniques. The reversal in the commodity occurred because a majority of
> the news was already in the price prior to the news. When the news came
out
> a few people/traders react to it only to find out that most people are
ready
> to take their profits after the initial reaction. This profit taking is
the
> reason the price declines and if it trades back into the prior range
> increased selling occurs from those who were recently long hoping for a
> positive reaction.
>
> Several other examples happened this past Friday. Some people were long
the
> SP in the afternoon prior to the two court rulings around 1395 feeling it
> may go Bush's way. The ruling came out and the spoos rallied to 1404, if
a
> sell stop was placed at 1395 you would have gone short and they traded
back
> down to 1388 area. The bonds were another example opening at 7:20 at
103-21
> and prior to the employment report they were around 103-25ish (a bullish
> report was expected), the report came out the bonds traded to 103-31, at
> that point place a sell order at 103-25 or slightly below since the range
> was tight. The report was not as bullish as expected, there was a slight
> reaction up, then profit taking set in.
>
> The news reversal is simply buy the rumor sell the fact or sell the rumor
> buy the fact which may explain Intel's short term reaction to bad news.
> "That warn" was already in the price of the stock, it was not a surprise
to
> most. Hope this all helps. Like I said they happen all the time. Said
simply
> "it is not the news but the reaction to it that is important".
> don ewers
>
> ----- Original Message -----
> From: "Dan Cash" <dcash@xxxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxx>
> Sent: Saturday, December 09, 2000 9:17 PM
> Subject: Re: [RT] Re: Trading Events
>
>
> > Don,
> >
> > Do you mind expanding on your trading news reversal technique in any
> detail you
> > care to, I would appreciate the insight?
> >
> > Dan
> >
> > Don Ewers wrote:
> >
> > > Ira,
> > > Can you enlighten us with an example, since I only trade, "what are
> billed
> > > as major event s" from the "news reversal trading technique".
Obviously
> your
> > > expertise utilizing options would be a welcome trading technique that
we
> may
> > > be able to learn from. I normally go flat ahead of these events
feeling
> it
> > > is gambling in lieu of trading, so I am anxious to hear your reply.
> > > don ewers
> > > ----- Original Message -----
> > > From: "Ira Tunik" <ist@xxxxxx>
> > > To: <realtraders@xxxxxxxxxxx>
> > > Sent: Thursday, December 07, 2000 1:22 AM
> > > Subject: Re: [RT] Dow
> > >
> > > > If one is just trading the underlying, then a cardinal rule should
be
> to
> > > be out
> > > > of the markets when major announcements are to be made. If you know
> how to
> > > > utilize options in volatility positions that are non directional,
then
> you
> > > put
> > > > on these positions just before announcements are made and trade the
> > > volatile
> > > > swings with glee. The bonds are a classic example of where this
works
> > > > wonderfully. There is sufficient liquidity in both the options and
> > > underlying
> > > > bonds to allow one to trade some of the huge swings the bonds are
know
> to
> > > make.
> > > > Ira.
> > > >
> > > > Don Ewers wrote:
> > > >
> > > > > Dom, all-,
> > > > > True, but one should not neglect events that "make the charts",
> meaning
> > > > > sometimes charts say one thing and an event and the price reaction
> to
> > > it,
> > > > > makes the chart say quite another and therefore a different story
> > > unfolds.
> > > > > We need to be flexible enough in our trading to accommodate this.
> Charts
> > > > > rule until they fail, one good reason depending on your trading
> > > timeframe to
> > > > > avoid major events that have been built up to be market movers. It
> is OK
> > > to
> > > > > stand aside at times and let the story be told?
> > > > > don ewers
> > > > >
> > > > > ----- Original Message -----
> > > > > From: "Dom Perrino" <domenick@xxxxxxxxxxxx>
> > > > > To: <realtraders@xxxxxxxxxxx>
> > > > > Sent: Wednesday, December 06, 2000 9:46 PM
> > > > > Subject: Re: [RT] Dow
> > > > >
> > > > > > My belief is that technical analysis already reflects ALL,that
is
> > > known
> > > > > > about a stock including all fundamental factors. I believe that
is
> the
> > > > > > standard belief of technicians. It seems that is what you are
also
> > > saying.
> > > > > > My original email to Bob may have been ambiguous.
> > > > > > Dom ----- Original
> Message -----
> > > > > > From: "Ira Tunik" <ist@xxxxxx>
> > > > > > To: <realtraders@xxxxxxxxxxx>
> > > > > > Sent: Wednesday, December 06, 2000 10:03 PM
> > > > > > Subject: Re: [RT] Dow
> > > > > >
> > > > > >
> > > > > > > Those factors would all have been factored in before you
> selected
> > > the
> > > > > > stock to
> > > > > > > trade. They would be terrible if you were looking for a short
> in a
> > > down
> > > > > > market
> > > > > > > and they would be wonderful if you were looking for a stock to
> trade
> > > in
> > > > > an
> > > > > > up
> > > > > > > market. After the selection, you would trade it technically.
> Ira
> > > > > > >
> > > > > > > Dom Perrino wrote:
> > > > > > >
> > > > > > > > Bob,
> > > > > > > > In your opinion,what would you consider key differences
> between a
> > > > > > technician
> > > > > > > > and a fundamentalist ( like yourself ) if both let the
market
> tape
> > > > > call
> > > > > > the
> > > > > > > > shots on a day to day basis, and, as you well put it,
keeping
> the
> > > > > > account
> > > > > > > > healthy.
> > > > > > > > It would seem to me that the technician would have an easier
> job
> > > since
> > > > > > on a
> > > > > > > > short term basis p/e, book value,sales, balance sheet,
current
> > > ratio
> > > > > > > > etc.would not need to be factored into the trade .
> > > > > > > > Dom
> > > > > > > >
> > > > > > > > ----- Original Message -----
> > > > > > > > From: "Bob" <bobskc@xxxxxxxxxxxx>
> > > > > > > > To: <realtraders@xxxxxxxxxxx>
> > > > > > > > Sent: Wednesday, December 06, 2000 1:21 PM
> > > > > > > > Subject: Re: [RT] Dow
> > > > > > > >
> > > > > > > > > An elitist? I hope not and I certainly hope that you
detect
> a
> > > man
> > > > > who
> > > > > > > > > doesn't send insulting comments about someone he knows
> nothing
> > > > > about.
> > > > > > > > >
> > > > > > > > > As to the content of my mail, I was trying to state that
as
> long
> > > as
> > > > > > > > > liquidity and beta are the principal drivers of the nas
> while
> > > value
> > > > > > and
> > > > > > > > > common sense take a back seat, all gains should be viewed
as
> > > > > temporary
> > > > > > and
> > > > > > > > > unsustainable. As to "burning flesh", I don't care which
> way
> > > this
> > > > > > market
> > > > > > > > > goes as long as it goes .. I let the market tell me what
to
> do
> > > on a
> > > > > > day to
> > > > > > > > > day basis and I don't fight the tape. My account is
healthy
> ..
> > > I
> > > > > hope
> > > > > > > > > yours is as well.
> > > > > > > > >
> > > > > > > > > Bob
> > > > > > > > >
> > > > > > > > > At 03:35 AM 12/6/2000 -0500, you wrote:
> > > > > > > > > >Bob,
> > > > > > > > > > I've been a student/investor for many years.
Sounds
> to
> > > me
> > > > > like
> > > > > > > > you've
> > > > > > > > > >become "insulted" that the mob out there doesn't have
your
> > > > > > intelligence
> > > > > > > > and
> > > > > > > > > >prescience.
> > > > > > > > > >
> > > > > > > > > > Do I detect the burning flesh of an elitist?
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > >To unsubscribe from this group, send an email to:
> > > > > > > > > >realtraders-unsubscribe@xxxxxxxxxxx
> > > > > > > > >
> > > > > > > > >
> > > > > > > > >
> > > > > > > > > To unsubscribe from this group, send an email to:
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> > > > > > > > >
> > > > > > > > >
> > > > > > > > >
> > > > > > > > >
> > > > > > > >
> > > > > > > >
> > > > > > > > To unsubscribe from this group, send an email to:
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> > > > > > >
> > > > > > >
> > > > > > >
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> > > > > > >
> > > > > > >
> > > > > > >
> > > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > > To unsubscribe from this group, send an email to:
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> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > >
> > > > >
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> > > >
> > > >
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> > > >
> > > >
> > >
> > >
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> >
> >
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>
>
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