Now Reading
Sell The Rumor, Buy The News
0

Sell The Rumor, Buy The News

Sell The Rumor, Buy The News

by The MoleMarch 26, 2020

It’s a complete mystery to me that some of the smartest people I know continuously have a hard time wrapping their mind around one of the simplest tenets of trading. Plus it’s one that spells double true when it comes to high volatility bear markets: Buy the rumor, sell the news. Of course in the case of bad economic news in the context of a bear market this rule should be inverted to ‘sell the rumor, buy the news’.

I’m starting this post a little late for two reasons: 1) Europe yet has to switch over to DST and thus the market opens an hour early for me, and 2) I really wanted to wait for this morning’s jobless report which was widely expected to hit markets like a Panzerfaust.

Except that it didn’t which of course triggered a series of indignant comments on ZeroEdge and various financial tweets. Although I can sympathize it’s a lesson that I unfortunately had to learn the hard way back in 2008 and 2009. Fortunately it is one I have never forgotten as the cognitive dissonance of the marketplace should never be underestimated.

Or in other words: hope dies last.

May I remind everyone that we are still wading knee-deep in an extremely high volatility market environment, which usually has a tendency to suspend common sense as we know it. The SPX chart above demonstrated this very efficiently and two-fold:

  1. The IVZ-Score still ranks sky high at 3.75 – which is 3.75 standard deviations off the median.
  2. Expected move for this week was breached yesterday again and then some, after which the SPX dropped backed down a bit to near 2500.

More market analysis and some perspectives below for my intrepid subs:

evil_separator

It's not too late - learn how to consistently trade without worrying about the news, the clickbait, the daily drama and misinformation. If you are interested in becoming a subscriber then don't waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Please login or subscribe here to see the remainder of this post.

About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
Enjoyed this post? Consider a small donation to keep those evil deeds coming!

BTC: 1MwMJifeBU3YziDoLLu8S54Vg4cbnJxvpL
BCH: qqxflhnr0jcfj4nejw75klmpcsfsp68exukcr0a29e
ETH: 0x9D0824b9553346df7EFB6B76DBAd1E2763bE6Ef1
LTC: LUuoD6sDWgbqSgnpo5hceYPnTD9MAvxi6c
PayPal: https://paypal.me/evilspeculator