Hi AnsbeerIt's common for a good report to lead to a drop in the...

Hi Ansbeer

It's common for a good report to lead to a drop in the price, or a bad report to lead to an increase in price.

When good news is expected, shares will often rise leading up to the known announcement date. The unexplained rise in price attracts attention and further buyers, rumours start flying, one thing leads to another, and usually the price goes up much more than is justified by financial reality. The market is forced to adjust to that reality when the news actually comes out.

This phenomenon leads to the saying: "Buy on the rumour, sell on the fact." And it works in reverse too: "Sell on the rumour, buy on the fact." Obviously, these aren't hard and fast rules, but they concisely reflect the tendancy of markets to either get too excited or too pessimistic about the future.

Z