From the desk of Tom Bruni @BruniCharting
In March I wrote a blog post explaining why I don’t consume traditional media and the value I find in tuning out “the noise.”
I got a lot of great feedback on that post and feel that it’s a lesson worth reiterating every once in a while, so today I want to share a great example of the constant barrage of information we have working against us as market participants.
Remember the Chinese Yuan? The currency crisis that was going to crash US and Chinese stock markets in August? Here are headlines you get from early August when you search “yuan stock market.” Notice they focused primarily on the Yuan and its negative implications for the stock market.
Click on the image to enlarge view.
Several months later the source of that hysteria is back with USD/CNY sitting at the 7.00 level it broke out from…and yet today there are crickets. No CNBC or Bloomberg specials, no front-page cover stories, nothing.
When I search the phrase “yuan stock market”, here’s the only headline from the past 2 weeks that included the word “Yuan” and the subheader says “We wouldn’t get too excited about the yuan.”
So despite USD/CNY being at the exact same level it was in August, the narrative around it has completely changed. We’ve shifted from several headlines per day about its negative implications to a few per month, many of which only include the keyword “yuan” as opposed to making it the centerpiece of the article.
They’ve all moved onto the next thing to worry about. This week it’s the impeachment hearings. Next week we’ll be back to trade war concerns. The following week it’ll be holiday shopping traffic. After that, it’s the November jobs number. Whatever they need to cook up to sell their ads, they will.
And it’s not their fault.
It’s the media’s job to draw eyeballs and what we end up with is a process that looks like a circular reference in excel. The media needs information on why the market is doing X, so they call their contacts at these financial institutions who tell them it happened because of Y, then their clients see the headlines in the media and call up the financial institutions asking about X and Y, and the cycle repeats.
There’s no point in getting mad at it. Most people are doing their job the best they know how…just like you and me.
You’re not going to change the world by spending your entire day on Twitter lambasting the media over the way they operate. This isn’t high school’s mandatory summer reading list…you have a choice in what content you consume. At the end of the day, it’s our job as market participants to focus on whatever factors drive our process…not the “headline of the day.”
That means something different for everyone.
For us at All Star Charts that means focusing on price action and what the market is actually doing, not what the noisemakers are selling us. We’ve built our weight of the evidence approach in a way that allows us to navigate markets regardless of what the 24/7 news cycle produces.
So the next time you find yourself getting mad at the media, flip the script and ask yourself why and what you could do differently to not let it affect your own trading/investing and life.
Thanks for reading and please let us know if you have any questions!