Short Term Trading Weekend Lounge: 1 - 3 July, page-18

Reading Announcements

If I had a $1.00 for every time I heard "but I don't understand its a great announcement but the SP has closed lower than what it opened at"! In many cases a stock will be in accumulation phase, smart money just soaking up as much as they possibly can in anticipation for any positive announcements. This is when they let loose under the radar so to speak ( sell into the news) selling off to the unsuspecting retailers known as the mark up phase and more times than not accompanied by an upthrust bar-opening around the lows, hitting new high ground during the day only to close on its lows. you will get this kind of action on stocks with anticipated news where future news has pretty much been built into the SP, although in saying that every known again you get an announcement out of the blue totally unexpected news eg a new discovery Gold, Copper, Nickel etc etc... or a major contract with a major player which may result in an SP re-rate. Generally speaking with the limited knowledge I have with VSA ( volume spread analysis) it teaches you to think bearish on positive news and bullish on negative news! sounds wrong hard to get your head around!
In conclusion just be careful with buying into a positive news announcement and remember that most but not all positive announcements are accompanied with an upthrust bar- smart money selling into the news, keep an eye on volume and spread and in most cases FA will win the battle over TA, all just IMO Only! hope everyone has an awesome 2016/2017 Year
Cheers,
Z.