Market Schizophrenia

[Shakone]

I am toying with a number of 'less spammy' (not my words) avatars that still have a subtle Jigsaw theme..

 

[wackypete2]

OK, i'm out. It's a beautiful day here and I intends to enjoy it!

Catch everyone later.

Peter

 

[eighteen]

I disagree with this. I don't think that is what caused anything. I think these are the reasons given for the moves in retrospect by the media.

Of course, it is true that the things you mention did happen. It is also true that the market went one way and the other. Still, it's not proof of cause.
.

if you look at the timing of the speechs and the market move;s they happened at exactly the same time, its all that moved it. i dont watch bloomberg or cnbc, i just watch twitter, sometimes read Zerohedge to find out whats going on, although alot of the stuff is wrong they have been on the money around 70% of the time

i fear this could get into technicals vs fundamentals. but atm news moves the market.

 

[Shakone]

if you look at the timing of the speechs and the market move;s they happened at exactly the same time, its all that moved it. i dont watch bloomberg or cnbc, i just watch twitter, sometimes read Zerohedge to find out whats going on, although alot of the stuff is wrong they have been on the money around 70% of the time

i fear this could get into technicals vs fundamentals. but atm news moves the market.

post hoc, ergo propter hoc?

 

[ZEN archer]

i fear this could get into technicals vs fundamentals. but atm news moves the market.

or "print on" "print off"

 

[eighteen]

post hoc, ergo propter hoc?

i think the correlation is overwhelming to deny it. i could cite about 100 examples of where news moves the market. but its all a shroedinger experiment isnt it.
stick to the tea leaves if you want to live in denial that their is no market moving news.

Infact bp oil spill? would the shareprice have dived by that much if there was no spill?

 

[eighteen]

or "print on" "print off"

haha you just summarized what i was trying to say, in 4 words.

 

[robster970]

but atm news moves the market.

True but whether it alters the perception of value is another matter entirely.

 

[eighteen]

True but whether it alters the perception of value is another matter entirely.

Well i think we are dealing with issues here, there is book value, and then there is sentiment value, share X might be worth 5$ on the book value, but in theese times of turmoil it may trade for 4$ because people in the market dont believe that the market is "safe" to be in, so the fair value wont be reached. so i think it does alter perception of what a share is worth somewhat, because of the attitude that, even if the book value is x i dont wanna get in and be holding a share that is not worth that, or could fall further.

but i guess thats what differentiates us from investors, im sure investors are after long hold undervalued shares, but we want quick in and out moves rather than long hold ideals.

 

[robster970]

That's not really what I meant.

Can you not see that you are acting no differently to a news agency, coming up with your own hypothesis post fact of why it moved and then trying to defend why you may be right?

Correlation does not imply causation.

 

[eighteen]

That's not really what I meant.

Can you not see that you are acting no differently to a news agency, coming up with your own hypothesis post fact of why it moved and then trying to defend why you may be right?

Correlation does not imply causation.

Yes it does, or are you suggesting that smokers getting lung cancer in higher rates doesnt prove smoking causes cancer?

im confused by your earlier statement, of course news affects perception of value, the print or no print is all this market has.

 

[Shakone]

Yes it does, or are you suggesting that smokers getting lung cancer in higher rates doesnt prove smoking causes cancer?

im confused by your earlier statement, of course news affects perception of value, the print or no print is all this market has.

Correlation does not imply causation - Wikipedia, the free encyclopedia

 

[eighteen]

I know what you are saying i got it the first time round, i cant prove it either way though so quit trolling. Now keep up with the technical analysis wont you, because any proof of that is shot to death.

 

[robster970]

Yes it does, or are you suggesting that smokers getting lung cancer in higher rates doesnt prove smoking causes cancer?

im confused by your earlier statement, of course news affects perception of value, the print or no print is all this market has.

We are talking about what moves the price of a security around, not whether smoking causes cancer.

Sorry, I should have been a bit clearer. I can see it sounds a bit cryptic. News typically moves price but it rarely has a profound effect on value.

 

[DionysusToast]

That's not really what I meant.

Can you not see that you are acting no differently to a news agency, coming up with your own hypothesis post fact of why it moved and then trying to defend why you may be right?

Correlation does not imply causation.

Not only that - there is the impact of 'scale' too.

If a news item is responsible for a spike in activity, how much successive activity can be attributed to that event?

 

[barjon]

Well - that's red rag to a bull....

So - let's go there.....

I agree - it is nonsense - some brainiacs decided risk was off for 3 days and the market moved down, then on day 4 they realised it was all just their imagination and it do buy back in again.

The media is one part of the issue - but the moves themselves are not the product of rational assessments of where long-term money is safest because it doesn't change day to day.

It's just a herd doing herd-like things until the market stretches a bit far in one direction and suddenly it's 'cheap/expensive'.

I don't think risk was off for 3 days at all - that implies rational decision making...

I know the futures are basically hedging/speculation vehicles and without wishing to start up the age old "who leads what" argument relating to the underlying market I'm not sure that what anybody thinks adds up to much.

Given that institutional money carries the greatest weight in moving the underlying market what must matter most is the net inflow or outflow of money into or out of those institutions.

If money is pouring into an equity fund, for example, they are duty bound to buy whether they think it's good idea or not. Vice versa when money is pouring out. The best they can do in such circumstances is get the best average price they can and I dare say they use the opportunity of the news to help with a bit of clever trading back and forth whilst they build/unload the required amount.

 

[eighteen]

We are talking about what moves the price of a security around, not whether smoking causes cancer.

Sorry, I should have been a bit clearer. I can see it sounds a bit cryptic. News typically moves price but it rarely has a profound effect on value.

Im not sure news can effect value, all im concerned about is price, but isnt price all that matters really?

 

[ZEN archer]

We are talking about what moves the price

.

 

[eighteen]

I think instead of printing we are now getting "the idea of printing" which seemingly has the same effect for a very small amount of time

 

[robster970]

Im not sure news can effect value, all im concerned about is price, but isnt price all that matters really?

Yes.

Isn't the flow of money and therefore the price of a security based upon the perception of whether something is under or over-valued?

Is it important to try to backward fit the reason for the money flow?