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Home | Finance | Stock Market Strange indeed, because on the 12th, the day after the attack, the market gained 106 points. In this world where news travels instantly, why would it take 2 days for the market to react to the attack? The article goes on to say that "even positive economic news didn't help yesterday." The irony of this statement is that, if the Dow had gone up that day, the "positive economic news" would have been credited for the gain! Indulge me for a few minutes if you will. Here (http://www.ewtalternative.com/articles/08.financialMedia1.gif) is a price chart of the Dow showing the area mentioned in the above Dispatch article (also a panned chart of the same period) (http://www.ewtalternative.com/articles/08.financialMedia2.gif). What I'd like you to do, is to pretend you know nothing about a terrorist attack. Suppose you are given this chart and told, 'on one of the days depicted here, a terrorist event took place.' Now your job is to pick the day that you think the attack occurred on. Analyze the chart, take your time, and pick a day. The biggest drop in the chart occurred on the 10th of March. That would have been the day I would've chosen, perhaps you picked that day as well. Of course we know that the 10th was the day before the attack. There are a number of significant drops in this downtrend which began on the 8th of March. The March 15 drop does not stand out as more drastic than any other in the trend. Perhaps I've proven my point, and it is this - without any knowledge of the event, neither a common person nor an analyst could have pinpointed the correct day by looking for evidence in the chart. Why? Because there is none. This price trend played out exactly as a million others prior to it, the market did nothing out of the ordinary here. Why does the financial media mislead us? Why instead does it not educate us regarding price behavior in the stock market? Surely we would stand to benefit from such knowledge. Article Source: http://www.articlewheel.com
Erek Allon is a trader, freelance market analyst, and author of the tutorial How to Count Price Movements and Trends. He is sole discoverer of a new stock market model called REM which he promotes from his website EWTalternative.com
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