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It looks like they're selling the news, but why\?

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We'll once again say, "who cares." We're doing this only to prove a point. If traders are too busy trying to answer questions and not listening to what the market is telling them, they're mission out on opportunity. Case in point is a stock we just mentioned an hour ago. Don't forget every darned index we've had up today and the levels we've discussed. The 10-minute charts tell us everything we need to know about what type of action short-term traders might have needed to do. We mentioned earlier today about the "possibility" of selling the news and so far we've said that has been the case. By the time we finish this writing, things can change, but here's another lesson that traders can be alert to in the future.

Sun Microsystems Chart - 10-minute interval.

Once the Florida court decision was made public, the activity in shares of SUNW were quick evidence that the market was selling some stocks on the news. Notice the interval from $40 to $41 then the quick reversal! Our "bullish trading scenario" was that market makers might "step away" if they felt that this was really great news. We got an answer quick that this stock wasn't going to benefit.

Cisco Systems Chart - 60-minute interval.

Rally on the news, then sell! Shares of CSCO also depicted this action. We're encouraged by the way the stock found support on the 50-period MA and now that is a good stopping level for short term traders that might still be bullish here.

Dow Industrials Chart - 10-minute interval.

Remember that alert we had set on the Dow Industrials at 10,800? Did you're alert go off as ours did? Did you see the quick reversal in the next 10 minutes. What about the 100-point decline in the next 30? We'll keep the Dow Industrials on our key index list in the future.

30-year Treasury Yield Chart - 10-minute interval.

The bond market closed just after the Florida court decisions, but it looks like some traders went back in and bought some bonds. Hmmm, yields starting to decline, what else should we be looking for?

Gold/Silver Index Chart - 10-minute interval.

OK, point taken, we see what's going on here and it may give us a hint, but take what we're about to make comment on not as a "change in philosophy", but now step back and see what is taking place.

The bigger picture

Now that we've taken a look at some of the short-term 10-minute charts we can't get "tunnel vision". What have interest rates done today on the 30-year (TYX.X) and the 10-year (TNX.X)? For the day they are higher! What has the Gold/Silver Index (XAU.X) done today? It's gone higher! While it is only one day, what does economic theory say about interest rates and gold moving higher in tandem? Economic growth! Again, it's only one day, but readers should understand that at some point in time, the markets begin to come to some sort of agreement on things and it's at that point that traders who are alert to the possibilities are in a position to benefit most.

-Staff Analyst

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