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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: profile_14 who wrote (82990)	6/28/2000 11:53:00 AM
From: Night Writer	Respond to of 97611

"Understand the concept of buy the rumor, sell the fact" The market tends to discount advertised events by moving before they actually occurr. Once the events actually arrive, traders often take profits. For example, let's say the head traders at the worlds largest institutions expected the Fed to hold rates unchanged and move toward a neutral bias. Presumably, these beliefs would be passed along to their clients and the market place would begin to discount higher bond prices up to the day of the announcement. However, once the FED finally announces its decision to hold steady, then many of those same traders will take profits into the initial surge. This scenario is known as buy the rumor, sell the fact. As a swing trader with a 2-5 day hold time, this concept can be helpful to getting you out with the maximum amount of profits. We often see the same activity in individual stocks. How many times have you seen a stock rally into an earnings report, only to fall like a rock right after they report and actually beat the estimates. This is due to the old "buy the rumor sell the fact" market psychology. Beautiful here, I'm off to the golf course. NW