Stock Reports And The Events They ReflectStock reports are like a giant mirror. These updates reflect changes in the economy and even world events with comparable changes in the Wall Street news. When the news is good, the market tends to mirror that good news going up; when the news is bad, the market usually corrects with a fall. Such was the case on Tuesday, July 24, 2007 on Wall Street as the news reflected far more losers than winning stocks. Learning to monitor the dayís events helps investors to predict sudden turns in stock reports and react to them correctly, either by sitting tight and waiting for the correction to end, by profit taking or speculating when a move occurs.
Stock Reports In The Daily News
On this particular day, a sharp pull-back occurred when a series of poor earnings in stock reports and growing concern about the mortgage market created a drop in stock prices, spearheaded by the Dow Jones Industrials fall of more than 200 points. Unstable markets frequently occur at the end of a quarter as earnings statements are announced and this was the case for such companies as DuPont Co., whose flat second-quarter profit left it as the biggest loser for the day. Earnings season, or the end of a quarter, occurs when companies announce their results and these are times when savvy investors pay close attention to both the stock reports and the news.
In addition to the failings of companies to meet their earnings targets, common stocks can also suffer from economic instability, a fact that frequently appears in stock reports. Continued weakness in the US housing and automotive markets continues to drag on the economy and the concerns that plague the sub prime mortgage market still exist, as evidenced by Countrywide Financial Corpís profit warning statement. Of the 30 components on the Dow stock reports, the only investment option that didnít fall this particular day was Verizon Communications Inc, which made only a modest gain.
Analyzing the stock market indexes showed that after a steady climb put the market at record levels, a sell off was likely as investors looked to lock in their gains ahead of the various corporate stock reports. Combined with the economic news, the profit taking created a drop on the Dow has only been exceeded this year by March 13thís drop of 242 points.
The keys to creating an investment strategy during an unstable time are to do your research and act at the right time. Research includes monitoring the stock reports, understanding current events, technical analysis and charting your target companies. By understanding the news and knowing the financial health of your potential acquisitions or liquidations, you are better prepared to make wise decisions.
In addition, timing cannot be overstated. If you have a hot stock but you hold it too long, a bad earnings statement report on the stock could devour your profits. Conversely, if you choose to sell a struggling stock just before it turns the corner you will take a loss when you should be making a gain. Time is of the essence but knowing what to do when the time is right separates investors that make money and those that make it for someone else.
Stock Trading System
Successful trading is the result of putting the correct information into play at the proper time. A large part of that ability is utilizing a trading system like Japanese Candlesticks to chart stocks and analyze trends. The signals contained in Candlesticks helps investors to spot trends and react to potential changes in the market before the stock reports are even announced.
Like a giant mirror, the stock market reflects the events of the day, as well as the stock reports, and reacts accordingly. An investor who is willing to do his or her research and perform Candlestick charting will be more successful at finding the trends and profitably moving on changes in the market.