Discover what everybody is interested in
Today’s post deals with media phenomenons, that for us as traders can be very important.
As we know markets are made by people who sell and buy. And most of these people read newspapers or news related websites. So if we are able to discover what interests them the most, it helps us creating a better opinion about the markets.
If you read news most of the time there is a topic that concerns the media most. And it is quite easy to discover what it is. Just browse through some news pages or newspapers and you will find the topic that has the most buzz. It is the one topic you can find in each newspaper, homepage and so on. And this topic has the ability to move the stocks of a sector, a company or even the whole market (remember all bank related items in 2008/2009).
The media we use as traders is usually economy and stock related, such as www.money.cnn.com, www.briefing.com, the Wall Street Journal or the Economist and so on. There you will find what is most interesting to the trading community. And that is why it should also be interesting for us.
A current example is Apple. In late January 2010 we could see a very high interest about this company regarding the presentation of their newest product, the iPad. The nearer the presentation came, the more rumors and speculations appeared in the media. It became kind of a hype with huge expectations for this product. And as you can see, nearly a week after the iPad was revealed journalists are still in discussion about it and the direction of the company.
What such special interest in a company tells us traders is how and that we can participate in a hype and how we can take advantage of what happens next. If you have hype media coverage about a single company or a product or a sector it will most likely move stocks. If you find a company the media is currently very interested in, imagine what this news could mean for them (earning money, losing money, innovation…) - and watch how the market reacts upon this. If something kind of dominates the headlines, you won’t be the only one who wants to use this information. Nearly every trader will know about that, too. And they will -as a mass- move the stock in the direction of the most favoured interpretation of this Event.
Related Article: Important information are not always in the Headline
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