By: Chris Rowe — November 19, 2018
When the stock market is getting spanked, as it has been lately, emotions run high... and the filthy dirty media capitalizes on it, at your expense.
I'm writing to you today, just in case you don't already know about how they corrupt investors' judgement and decision making.
As you know, the media profits by taking an emotion many people are already feeling and then heightening it.
Social media blatantly does this on a very scary level. It's pretty easy to see how they show you more of what you like, and show you posts that are in line with what you've said or read.
But today, I'm talking about the "talking heads" on the major television networks.
Trying to Change Your Mind Isn't Profitable
If you hate Democrats, then Fox will do whatever it can to make you hate them more. If you hate Republicans, CNN will do whatever it can to make make you hate them more.
If lots of investors are feeling fearful or panicky, the financial media will do whatever it can to make you panic more.
I mention that because, fear has been running high lately.
It's clear as day when you look at this 5-year chart of the CBOE Volatility index, a.k.a. "The VIX", a.k.a. "The Fear Gauge".
I took the liberty of shading it in blue when investors are relatively comfortable and so on.
One of my biggest problems with the financial media is they pretty much flat out lie. For example, they talk to you as though the stock market is in decline because the viewers at home are afraid of what's to come for the economy.
It’s simply not true.
Markets aren't moving because of how individual investors are trading.
Studies show that over 80% of trading volume is automated – based on algorithms. When triggered by certain price action, they buy or sell a bunch of stock.
In fact, these algorithms trade on the same indicators I teach you about in Technical Analysis Millionaire and many of these indicators are overlooked by almost every mainstream service.
Crushing Your Account to Stay Relevant
If analysts or the media have nothing to say, or if they say: “I don’t know,” then they will cease to exist.
So sometimes they'll just spit out whatever they can, to stay in business.
You don’t want to know how I could know this for a fact. But ask any insider in the financial media business who truly knows, and they can say the same.
And like I said before, it’s scary.
I’m talking MAJOR networks where they create stories and where the talking head “analyst” has an earpiece with someone telling him what his opinion should be.
Sure, much of the time, they are correctly reporting on why markets are doing what they are doing in the short term, when it’s obvious
But they almost never get it right when it comes to the FUTURE.
The short-term movements they do accurately report on have virtually no predictive power in the stock market.
Their hedge: There’s usually no way to prove that the reasons they give for market movements aren’t accurate.
But that doesn't change the fact that the real predictive power, short, medium and long-term is in technical analysis.
If markets are moving in a trend, then THAT’S what’s going on -- and nothing more.
Big investors don’t decide to start buying or selling stocks and then, as soon as they do, call media outlets and "show them their cards".
The media often just attaches a reason for movements in the market and -- as scary as it seems -- convince the world that what they are saying is a fact.
It’s like astrology. One can read ...
“The New Moon in Sagittarius offers up new possibilities for adventure. This is a great day to plan a trip to a place you've always wanted to go.”
… and then look around and find several possibilities for adventure. The horoscope seems to be spot on.
I admit, this comparison may be a stretch. But after spending 20+ years as an investment insider in many aspects of the business, I can tell you it’s really not far off.
What's more, the astrologist isn’t putting a major part of your life at risk. If anything, they make you more positive. The financial media does serious damage to your investment account -- no joke!
Markets can only move when large institutional investors are acting on their sophisticated, multi-million dollar research or when major market indices "trip" a key price level, triggering algorithms that buy or sell billions of shares.
They don’t move on “stories” as much as they move on “action”.
Why do bear markets bottom out long before the economic recovery is “underway,” and the before media starts reporting reasons for the bounce?
Think about this: Even when I was a rookie money manager, I was able to literally move stocks 20%, 50% or 100% if they were small cap stocks that only traded 50,000 - 100,000 shares per day.
This was with NO NEWS on the company. Just based on my own humble opinion that it was worth more.
In fact, anyone reading this article can use what they have in the market to actually move certain small stocks up 30% or so, if those stocks trade light enough volume. I’m talking illiquid stocks.
This is because a) there aren’t many shares outstanding, and b) there isn’t much of a market (not many sellers of the stock you’re buying).
But when a few people can change directions of stocks like Exxon Mobil, Apple and Microsoft that have 5-8 billion shares outstanding, and trade 20 -- 200 million shares per day, you know those people have the cash to get the true story.
And when the market closes, you’ll hear the media creating reasons why it happened (they have five easy canned reasons that apply to any move -- just in case).
Listening to those reporting on what financial markets are doing can often do more harm than good. If every individual investor knows this already, then why do they bother to keep tuning in?
ANSWER: Because they don’t feel confident enough to formulate their own opinion on the market.
But I’m telling you right now you DO have that ability. You can formulate your opinion based on what the power players with the market-moving money are telling you. They are speaking to you whether you know it or not, just as a crime scene speaks to a crime scene investigator, or a body speaks to a doctor or coroner. Big players leave clear footprints, and history repeats itself.
Price action tells the true story.
You can formulate your opinion by understanding technical analysis, such as charting or relative strength relationships. You just have to do two things:
1. Understand how to "hear" what the technical indicators are telling you (this requires nothing more than a simple education in technical analysis that anyone can grasp).
2. Actually listen to what you’re "hearing" (which means fighting your own human emotions that can cause even seasoned market analysts to stray from their time tested indicators and systems).
If you keep reading our stuff, I will give you the best strategies on how to completely hedge yourself from emotional errors. I'll try to teach in the exact way I was taught by people who actually move entire stock markets with their trading.
It can’t be perfected right away, but here at True Market Insiders, you have people with Wall Street blood pumping through our veins ready to assist.
Stay safe, stay sane, and avoid the noisy distraction of the financial media.