≈ The Power of News ≈
Last week was a classic example (and a reminder for all who did not pay attention) of the power of news. There are two types of news events:
- Unknown News Events – Events that are unanticipated and essentially come out of the blue.
- Known News Events – Events that occur at an expected time and date.
On Thursday Apple came out and made an announcement revising its upcoming earnings downward. No one knew they were making the announcement and it caused Apple to gap dramatically down. These types of unknown events are tough on traders but are not fortunately not frequent. The more common type of event, one a trader can plan for, are known news events.
On Friday we had two major events scheduled: the release of the monthly unemployment report and a scheduled speech by Federal Reserve Chairman Jerome Powell. Both events on Friday occurred exactly when they were scheduled to occur, both had major market ramifications and served as catalysts for an explosive move upwards on Friday.
Day traders have longed known how to trade these types of known events and know how much money can be made on these volatile days. New short-term traders often get caught off guard by these events. At Tackle Trading this week in our morning Trader’s Lounge and live nightly shows we are going to be discussing how to trade (and protect yourself) around known events. With earnings season right around the corner these are shows you don’t want to miss this week.
Chart of the Day
S&P 500 (SPY)
The end of the week unknown and known news events created tremendous volatility during last weeks short-week and additional upward movement would send the SPY (A popular ETF designed to mirror the S&P 500) above the 20-day moving average. The SPY has not been above the 20-day since the start of December.
Video of the Day
What is Gamma? (BONUS: FREE Options Greeks Guide)
In this video, you will learn what the Options Greek GAMMA is and how it can be used in your trading routine in order to perform better in the market.
Traders Lounge 11am EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Halftime Report 12:30pm EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Market Recap 4:30pm EST
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.