Financial Headlines Lead Traders Astray
FINANCIAL HEADLINES EMBELLISH FACTS AND MISLEAD TRADERS
Today’s financial reading was much of the same foggy speculation, but, even so, I found it irresistible to point out one particular article’s lead headline (source mentioned on the chart) which went: “
“Silver Soars As The Dollar Dumps Most In A Year . . .”
This headline’s effect (on those less mindful than those of you who frequent this website) was to stampede traders to buy and sell the markets mentioned.
The operative emotional trigger keywords were ‘Silver Soars’ and ‘Dumps Most in a Year‘. Our approach on this website is to dispel BS using the pure reality of the price chart as our ‘magic glasses’ to see what’s really going on.
Let’s look at the Daily chart for Silver to crosscheck the ‘Silver Soars’ statement:
As the chart above shows, this ‘Silver Soars’ headline is a NON-EVENT on a daily chart of silver prices. That lonely green bar is supposed to change our minds about the solid, months-long DOWNTREND?
I think not.
How about the US DOLLAR then?
So sad to hear that it “crashed by the most in over a year today.”
That sure sounds like a heck of a slide. It must be a massive red line on the chart then, yes?
Instead we look at a US DOLLAR chart and see this . . .
Take a few moments to look at the dollar chart above, because, if you don’t take your time, you’ll probably miss the great ‘dollar crash’ they’re writing about!
Now, I know that the writer is referring to the percentage move, but, that’s not the implication of the headline as written. What was written ended up being extremely misleading and alarmist.
Obviously, when one goes and investigates for themselves just what the markets referred to are doing, the exaggeration of events in these headlines stands out and begs the question of ‘how can events be so mis-written?’
We can just call it poor writing due to inexperience. That’s the kindest assessment we can make. The other alternative is more likely but will go unwritten at this time.
Does someone want traders to Buy Silver and Sell the Dollar?
Those that followed such headline suggestions would find themselves on the opposite side of two very strong price trends leading to likely losses and profiting those trading with the stronger trends and taking the very opposite positions suggested for others.
The bottom-line for us as traders and investors is familiar; we must check all opinions heard or read against the reality of the price chart. In this case the ‘greater fool’ would be someone who jumped and reacted to these headlines.
Examine the charts and provide yourself with tools to better ‘foolproof’ oneself from speculative opinions. – George
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