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Strategies & Market Trends : Evaluating Rumors and News Along With T/A and F/A -- Ignore unavailable to you. Want to Upgrade?

To: Wayners who wrote (138)	6/13/1999 10:12:00 AM
From: Wayners	Read Replies (1) \| Respond to of 141

Analyst Comments--These are often designed specifically so that the analysts clients and brokerage can do the opposite of what they are recommending. These have very short term effects on stock prices for only 1 to 2 days. Sometimes the effects don't last even that long. Look at how radical the comments are. The more radical the comments, the shorter the effect will be. For example if analyst comes out and says a stock is only worth 1/3 of its current price--immediately buy the gap down. If they say its worth double what its going for now--immediately sell the gap up. Barrons/WSJ Article--Affect prices for only 1 to 3 days and then people forget about it. Evaluate whether there is any real NEW information in the article. If there is no new information, its effect is going to last for 1 to 3 days. If there is NEW information, it must be something that is going to affect the bottom line of the company--seldom if ever is in an article. Earnings Release--General bias to selloff on earnings releases even when there is an earnings surprise to the upside. Effect is short term. Sell within the first hour of trading. For earnings surprises that are significantly above estimates like 30% to 100% better, the effect will last much longer like 1 to 3 days. CEO On CNBC--Buy before the actual interview, as soon as you know the CEO is going to be on. If he/she is on in pre-market you have to have access to Instinet. As soon as he/she open their mouth at the start of the interview--Sell. 10K/10K Release--Have never seen an effect from these releases. Conference Call guidance--These seem to have much more effect than just a few days. S&P Futures in Premarket--any large bias to buying or selling should be traded in the opposite direction for daytrading. Those specialista and market makers providing liquidity have to be able to make a buck and they will try very hard to reign prices back in so trade with the specialist and market makers on these. Buy a hugely negative S&P and sell a hugely positive S&P. PPI Report--See how they affect S&P futures. Trade with market makers and specialists. CPI Report--See how they affect S&P futures. Trade with market makers and specialists. Employment Report--See how they affect S&P futures. Trade with market makers and specialists. FOMC Meeting--Trade these BEFORE 2:15. If the market is expecting a rate hike, buy stocks at about quarter to 2 p.m. and sell/short at about 2 p.m. Don't wait for the actual news at 2:15. If the market is expecting a rate cut, buy at quarter to 2 p.m. and sell at 2:30 to 2:45. Greenspan comments--These will have effects that can last for weeks. Fed Govornor comments--These will last about 1 to 2 days. Company Press Releases--See how the news will actually affect the bottom line of the company. If it will not affect the bottom line, short/sell the news after about 1 to 2 hours--watch for the momentum to turn. Companies are very good at writing press releases. They will often make it sound like it will affect the bottom line when it actually will not or make only a very small impact on the bottom line. Earnings warnings can last a long time--weeks to 30 days or more. Companies that announce they are going to hit the number or exceed the number seem to have an effect for about 1 to 3 days--thats it. Businessweek articles--Same as WSJ/Barrons. Brokerage Upgrades/Downgrades--These often have no effect at all. The effect of these generally do not last more than a day. Earnings Revisions Up/Down by single Brokerage--I have never noticed effect from these like, Soundview raises estimates on XYZ from 1.22 for the year to 1.24 for the year. Acquisition Rumors--These can be good for 3 to 5 days if there is additional information like companies are definitely having talks. If there is no additional information, I'd say its a 1 to 2 day play max. Acquisition Announcements--Its going to gap. You can make money on these if you wait for the deals to close in 6 months to a year because the market won't price in the whole thing right after the announcment. Stock Split Announement--Announcement has to be on a market leading stock. Nobody cares if some unknown stock announces a split. The announcement will make a leader go up for 1 to 3 days and then sell back down to the pre-announcement levels. Generally you will get the biggest move just in advance of the split in the 5 to 7 days before the actual split. You'll start to get profit taking a day or 2 before the split which will tend to continue after the actual split.