STA Blog

‘Fake News’ in focus: Traders and investors, beware

In a week when even President Trump was called out for spreading dubious facts on social media, you know that the format has a big problem. The obvious scare-mongering is often easy to spot, and we all know that screaming headlines sell newspapers. But when it comes to the coverage of financial markets, the economy, and long term trends, the record is truly terrible.

The current meme – that ‘the market’ has become dissociated from ‘the economy’ – is really winding me up. The pathetic level of research, and the sloppy reports, can only be blamed on lazy editors. No fact-checking, no spelling and grammar nit-picking, nothing; just the urge to quickly get ‘content’ out there.

First: the US stock market is not ‘the market’. There is cash, fixed income, FX, commodities, real-estate and art, all of which interact to reflect current conditions and potential shifts in expectations and trends. ‘The economy’ is not USA Inc. Though still just hanging on to its top dog country status, it’s merely a question of time before China, with the biggest population in the world, should by rights overtake it. Furthermore, the scribes are really only looking at the Nasdaq index – and we all know exactly which handful of firms are doing the heavy lifting.

So today, coinciding with an interview done for the Investing Channel, I look at 3 other indices: Russell 2000, Madrid’s Ibex, and Mexico’s IPC. March 2020 was clearly a bad month for all of them, some giving up half of all the gains since 2009’s low in one fell swoop. All 3 have seen a death crosses – when the 50-day moving average drops below the 200-day one and both are dipping lower. Subsequent rallies are within traditional retracement parameters, and all remain below the 200-day one. Mexico peaked in 2017, Spain in 2007, and we’re nowhere near those lofty highs.

I’m tempted to say, they’re reflecting the new reality and waiting it out to see what the long-term consequences of the pandemic, and it’s casualties, will be.

Russell 2000

Russell 2000

Madrid's Ibex

Madrid’s Ibex

Mexico's IPC

Mexico’s IPC

Posted in Finance, Markets, Technical Analysis, Technical Analysis Courses, Trading, Trending
Tags: , ,

Leave a Reply

Your email address will not be published.

Disclaimer

The views and opinions expressed on the STA’s blog do not necessarily represent those of the Society of Technical Analysts (the “STA”), or of any officer, director or member of the STA. The STA makes no representations as to the accuracy, completeness, or reliability of any information on the blog or found by following any link on blog, and none of the STA, STA Administrative Services or any current or past executive board members are liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. None of the information on the STA’s blog constitutes investment advice.

Not ready to join? Stay Updated

If you want to learn more about membership and being part of the STA, sign up for our updates so we can keep in touch.

  html
  text

Monthly Meetings

The STA holds 11 monthly meetings in the City of London, including a summer and Christmas party where canapés and refreshments are served.

MORE INFO

Latest Videos

As a service to our members, many of whom are unable to attend all our monthly meetings, we have been making videos of meeting presentations for several years.

MORE INFO

STA Libraries

The STA has an extensive library of classic technical analysis texts. There are over 1000 books in the collection. It is held at the Barbican Library with a smaller...

MORE INFO

Market Technician

Latest research and news

More Info

World Class Tutors

STA Course Lecturers

More Info

Membership

Be part of something special

More Info

Blog

View latest posts

More Info