The unique relationship between market news and market behavior
Source: Internet
Author: User
We have been forced to hold on to the unique relationship between Market News (stories, chats, and gossip) and actual market behavior. We have seen this situation many times. People flock to buy stocks whenever the company announces bullish news, such as increasing dividends, improving earnings, or buying behavior. Then, after a few days of relatively strong market conditions, the stock price fell all over again, and those who heard the bullish news and recently bought stocks suffered huge losses. Why does this happen? Isn't these messages a good news? The answer may be the fact that "insiders", who know the content of the announcement, have bought a large number of shares before the bullish news is known to the public. This has led to a phase increase in the stock price. Then, when the notification is made public, the public will flood into buying stocks. So which of the following do you think are providing stocks for this (unfounded) purchase? No one else, it is the insiders who have accumulated the stock before the news is made public.
How can investors protect themselves in this situation? After all, he may not believe the news at the cutting-edge of market changes. Of course, if he can look at the market without fear before buying a stock, he will find that the market price has risen for a while before the announcement is made. The sharp rise in prices based on the expected bullish News (at least insiders expect this) provides these insiders with an opportunity, they held some large-value multi-headed stocks and threw them out in a market with a full rise.
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