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“Up is Good and Down is Bad” works for biz media, but not traders

January 23, 2019

Posted by Chris Roush

James Deporre writes for Real Money about why the common business journalism take on the stock market being up or down is not necessarily true.

Deporre writes, “We had a good example of this on Tuesday. There was a collective sigh of relief among many market players when the indices finally broke their streak of 11 straight days of closing higher than they opened.

“Some of the folks who were happy to see the downside action were bears and shorts, but many more were those who have a bullish bias and are struggling to put cash to work. Downside action is what is needed if you want to put money to work.

“This is something we never hear about in the business media. There is never any talk about the strategy used to put cash to work. The assumption is everyone is now 100% long and so we should root for the market to go straight up without a pause.

“The business media need to have some simple conventions to make it easier to present the news, but traders need to be very aware that what the media are rooting for may not be in their best interest. It can be very disconcerting when all the folks on television are talking about how fantastic the action has been while you are still struggling to find more stocks to buy.”

Read more here.

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