Just when you thought it was safe to turn on the teevee or search your favorite financial media website again, the dreaded “good news, bad news” debate is back again in full force. Friday’s non-farm payrolls miss and continued equity market futures weakness / bond strength brought pundits out of the woodwork once again to hash out whether or not bad news really is bad news.
If you’re confused about the constant flip-flop and what exactly it all means, don’t worry, the people debating this topic haven’t a clue what it means either.
That brings me to this blog post’s title, no news is good news. As a technician, I choose to focus on price and market behavior so that I don’t have to worry about what’s going on in the news. At the end of the day, I have to trade the market that exists, not the one that the media is portraying, or that financial pundits are trying to convince me is coming. It’s a personal choice, but I’ve never understood the “news junkies” that think having a handle on every single piece of information out there is going to give them an edge in the market.
For example, the economic calendar for top countries alone has 36 events scheduled for Monday, April 6th, according to tradingeconomics.com. Combine that with the several earnings reports and conference calls that come out as well and you’ve got quite a bit of data to digest. Not to mention what the calendar might look like if we were still in the heart of earnings season.
Nobody in their right mind could possibly estimate and interpret all that data and forecast what the market’s reaction will be with any sort of accuracy. Trying to do so would not only be a waste of valuable time and resources, but the process itself would likely be dull enough to drive even the most patient person insane. The good news is, you don’t have to stress over any of this because price discounts the “news” in advance and represents all of the forward looking expectations of its participants. If you’re studying price, you’re already well ahead of the game in terms of getting down to the real story, what the market thinks.
At the end of the day, I’m not saying it’s unimportant to know what’s going on in the economy or news in general, but don’t expect to make any consistent profits off of it. I learned a long time ago that as market participants we’re not paid to know why, which is why I focus on the what / when and ignore the rest.
As always, if you have any questions feel free to reach out and I’ll get back to you as soon as I can.