Headlines Will Be Your Downfall

Trading the News Doesn’t Work [Morning Reckoning] October 17, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Headlines Will Be Your Downfall - Put the choppiness to good use. - Real or fake news doesn’t matter… it’s how the market reacts. - You can’t trade the news… [Nvidia Helps Spark $100 Billion Sales Surge For A.I. Supplier?]( Nvidia’s little-known supplier is set for a [$100 BILLLION sales explosion]( …and it’s thanks in part to this mysterious device you see here: [Click here to learn more]( According to our research… This $100 billion sales boom could even turn this little-known supplier… …into the [the next trillion-dollar stock](. To see how to take advantage of this little-known supplier – before it’s $100 billion sales surge —— [go here now.]( [LEARN MORE]( Baltimore, Maryland October 17, 2023 [Greg Guenthner] GREG GUENTHNER Good Morning Reader, We’re searching for snapbacks as the October market chop continues this week… Stocks are already attempting to recover from last week’s slump as the major averages all posted strong gains on Monday. The much-needed September pullback has passed and traders are waiting and watching for the market to tip its hand. Some market pundits are convinced stocks are gearing up for a big year-end rally. Other prognosticators see nothing but doom and gloom on the horizon — along with a major market correction. I believe there’s credible evidence supporting both scenarios. But the market doesn’t care what you or I (or anyone else) thinks. We could gather the world’s most prominent bullish and bearish investors for a weeklong retreat to debate the merits of their arguments. Yet this exercise would have no bearing on how stocks finished the year. The world is much too complex for market action to work out this way. We’re always just a war, pandemic, or terrorist attack away from having to rethink just above everything we thought was true at the time… Right now, the averages are stuck in a sideways struggle. It’s a frustrating situation for many traders and investors since the market isn’t trending higher or lower. But I believe we can put these choppy periods to good use. Instead of forcing too many ill-advised trades, we’ve discussed some of my bigger-picture market philosophies [over the past several weeks](. And as the chop continues, it feels as if the action is subtly confirming the most important messages from our discussions: We have no edge in the markets… We cannot discover any magical formula that will give us an advantage over other investors… Fundamental information has no short-term predictive power… And, most importantly: Price is the most effective indicator we can use to time our buys and sells. While these concepts are relatively simple, they are far from easy to put into practice. Fortunately, the markets are gracious enough to give us another chance to get it right. Our best opportunities are always right around the corner, no matter how we’ve performed in the past. If we pay close attention and are willing to learn from our mistakes, the market will offer teaching moments we can use to get better every single day. [Warning: Will “Bidenflation” Destroy Your Retirement?]( [Click here to learn more]( If you’re like most Americans, you’ve worked hard for decades to build your financial legacy. And now, as a result of Biden’s disastrous money printing policies, that’s all at risk. According to one top retirement expert, “Bidenflation” threatens to destroy your retirement and make your hard-earned savings worthless. That’s why you must take action right away to protect yourself… [Click here now to get the simple, step-by-step actions to survive “Bidenflation.”]( [LEARN MORE]( A Big Bitcoin Fakeout One of these amazing teaching moments just so happens to be playing out this week. The story isn’t over yet, but the initial reactions as it began to unfold tell us a lot about how markets work in real time — and how emotional investors typically react to new information. It all started early Monday morning as futures were attempting to rally off their overnight lows. Bitcoin was also starting to tick higher after pushing toward $28K on Sunday evening. Traders were on the lookout for a bounce in the tech growth and crypto following Friday’s ugly performance. But they had no idea what would happen next… Just before the opening bell, Bitcoin suddenly exploded higher. It looked like it was starting to squeeze as the price jumped from $28K to almost $30K in just a couple minutes. But after a little digging, it appeared that this potential breakout move was triggered by a social media post. A crypto Twitter account with almost 2 million followers reported that the SEC approved BlackRock’s iShares spot Bitcoin ETF. Bitcoin was rocketing on the SEC approval news. There was just one problem: no other sources seemed to be able to confirm the information. After briefly hitting $30K for the first time since August, the rally began to unwind almost as fast as it appeared. By 9:45, Bitcoin was well below $28K again. Forty-five minutes later, the same Twitter account that initially spread the news was posting an apology: [cointelegraph tweet] Cointelegraph later revealed that they took a tip that turned out to be a fake Bloomberg headline. It’s still unclear whether this was a prank or someone attempting to manipulate the market. But as far as I’m concerned, the reasons don’t matter at all… You Can’t Trade the News To be clear, I don’t fault the folks at Cointelegraph for the SEC mixup. Whether the news is “real” or “fake” doesn’t really matter. What does matter is how the market reacts to the information. In this case, an extreme influx of buyers swooped in when the headline first hit social media, bullying the price of Bitcoin sharply higher. But what happened to these early news reactors? I suppose some of the more savvy buyers might have set alerts that allowed them to get in minutes — or maybe even 20-30 seconds — after the news broke. But there’s no realistic chance that any random trader was able to get in at the exact moment the market started moving. Accounting for slippage, I doubt it would even be possible to make a profit on a move like this. In a more likely scenario, you’d buy in the $29K range, then get stopped out minutes later as the move failed. Or, even worse, you would buy and then watch your position immediately sink into the red as Bitcoin reversed. As we discussed earlier, this story isn’t over yet. Bitcoin did manage to slowly move higher into Monday evening following the initial attempt at $30K. But I have to assume there are more than a few traders with underwater positions who attempted to play the headline. The takeaway is simple: You can’t trade the news or time your short-term buys and sells by the headlines. Whether you're tracking a planned earnings announcement or a surprise event, it’s impossible to know if the buying or selling force from the initial reaction will continue. This is also one of the main reasons I never attempt to play earnings. You never know how a stock will react — even to solid numbers. The CFO could hiccup during the conference call and send the stock down 5%. Or, you might have to sit through a couple of false moves while the market attempts to sort out its final reaction to the new information. The purest breakouts in the market that are most reliable happen because of supply and demand dynamics. Aggressive sellers overwhelm demand, or aggressive buyers chew through supply at critical levels. Once resistance is defeated, the stage is set for an extended move that can play out for days, weeks, or even longer. That’s where the real money is made. Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com [Exposed: Biden’s 2022 mistake to cost him election?]( [Click here to learn more]( Will this ugly scandal doom Biden in 2024? In February 2022, [Joe Biden made the most dangerous mistake]( any President has made in the past 150 years. If it all plays out like Jim Rickards is predicting… Biden’s blunder will soon cost good Americans EVERYTHING. There’s still time to protect your money. But you can’t wait. [>>See Biden’s terrible mistake here<<]( [LEARN MORE]( In Case You Missed It… Democracy! Sean Ring, Editor [Sean Ring] SEAN RING Dear Reader, Greetings from lovely Northern Italy. It’s a habit of the midwit to parrot famous quotes. One of the most often quoted is Winston Churchill’s asinine observation that “democracy is the worst form of government, except for all the others.” He should’ve put a period after “government” and left it at that. When I hear that quote, it’s one of my unfailing signals that the person I’m talking to is out of ideas. It’s right up there with “It is what it is” or “et cetera, et cetera.” When right-libertarians like me complain about democracy, opponents immediately convict us in their minds of “fascism.” As if they knew what fascism really is. No, I prefer anarchism first. There are rules but no rulers. If I can’t have that, I’d take monarchy. For those of you who think Charles I is the best argument against monarchy, let me break the news to you. Charles I is the best argument in the world for monarchy. Why? Because Oliver Cromwell only had one head to cut off. Ah, the helplessness you’re feeling right now as you read this stems from your inability to calculate just how many heads you’d need to sever to free America, or any country in the Western world, from its current depraved state. In essence, democracy is a hydra. As Hans-Hermann Hoppe rightly points out, “Democracy has nothing to do with freedom. Democracy is a soft variant of communism, and rarely in the history of ideas has it been taken for anything else.” The Founding Fathers Were Right Do you want to know how much the Founding Fathers hated democracy? Go to [Congress’ webpage on the U.S. Constitution]( hit CTRL F to open up the search window, and type in “democracy.” You’ll find the term appears zero times. The Founding Fathers knew exactly what happens when penniless morons have the same vote as property-owning, educated families. Unfortunately, now you do, too. “One man, one vote!” you shout in fist-clenching anger. Do yourself a favor and think about that sentiment for a moment. That penniless moron, who has no redeeming attribute other than being over the age of 18, has a say, however small, in how much tax you pay, in how much of your tax goes to the military, and in how much you can say on social media. Why? Because they’re your fellow countrymen? Well, I’ll tell you something: after this weekend, there are plenty of people in the United States with whom I’m positively thrilled to no longer share a country. Let’s see why. Whoopsy! This is positively delicious. David Weissman, if Paradigm Press allowed me to award “Numpty of the Week,” you’d be the first winner. [tweet] It’s amazing what happens when you back a terrorist group. And then wonder why the terrorist group you backed is supporting a terrorist group that’s just murdered over a thousand of your people. Yes, David, The Right was right, as usual, about BLM. More importantly, will David vote Democrat again in 2024 while the Republicans are taking care of his business? BLM, who I thought just took the money and ran, seems to have a pulse still, regrettably. [tweet] Sadly, BLMChicago took down this tweet. But the damage is already done. And what about The Squad? Little Mogadishu, a section of Minneapolis, Minnesota, is home to some of the 94,000 Somalis who either came after the civil strife in the early 1990s or are their descendants. Ilhan Omar, a Somali-American, represents Minnesota's 5th Congressional District. Her election to Congress in 2018 was a significant milestone, as she became the first Somali-American to serve in the U.S. House of Representatives. Did you not think they’d vote for “one of their own?” Should they not rightly be proud that one of their own is in the House? In case you didn’t know, Somalia is 99.8% Muslim. Why on earth do you think they’d side with Israel? This is my point. If you want a democracy, you’re going to get something you may not have wanted. And that’s people with opinions of their own that are anathema to settled Americans. These people think American support of Israel isn’t so much a friendship as an empowerment of an oppressive regime that’s turned Gaza into the world’s largest open-air prison. And what about poor old Larry Summers? [tweet] After decades of letting in people who think slavery built America, Larry wonders why the university didn’t back Israel unequivocally. Many of Harvard’s student groups explicitly backed the Palestinians before Bill Ackman demanded and received a list of those students from those groups. Suddenly, the kids found employment more important than “the cause.” With the students at odds with Larry, how could the university come out with a unanimous statement? But it’s not just America. Europe Creaking Remember when Ursula von der Leyen tweeted this: [tweet] No word on whether she’s okay with Israel publicly announcing they’ll do the same. The problem is Europe invited — yes, invited — 2 million people (mostly Muslim) in 2015, thanks to former German Chancellor Merkel. They’re here. They have their own opinions. But I guess Barack Obama didn’t care about that when he gave Tony Blair and Nicolas Sarkozy the green light to destroy Libya for its oil. That opened the boat routes from North Africa to Lampedusa and beaches beyond. Here was von der Leyen on Monday: [tweet] And here’s UK Prime Minister Rishi Sunak: [tweet] That Community Note, by the way, is true. And here’s why these politicians should beware of jumping on the bandwagon too soon. It’s not because Israeli civilians don’t deserve their support. They certainly do. It’s because they’re not necessarily representing their citizens’ views. You know, the people who democratically elected them. Here’s the data on the [Muslim population in various European countries]( Those numbers will only grow from here. Wrap Up This will end neither soon nor well. But I hope and pray for zero civilian casualties. Of course, that’s not realistic. But more disconcerting is that natives, refugees and newly minted citizens are tearing apart Western countries. We simply disagree. But the consequences of those disagreements are profound because of our system of government. Under a monarchy, there’s one person in charge. We can always behead them if we need to. And that’s a comforting thought. Well, maybe not for Charles I. But after the British realized their mistake, they restored the monarchy under Charles II. The Big Wigs were back, and fun was had by all. If only that apocryphal old yarn of Washington being offered the crown was true. I, for one, would have had him take it! Ah, one can dream. Now, back to bloody reality. Everyone has differing opinions on this topic… but let me know what you think by emailing me [here](mailto:feedback@dailyreckoning.com). All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Greg Guenthner] [Greg Guenthner, CMT,]( is chief strategist at Forge Research Group. He has spent the better part of the past two decades developing long-term and short-term strategies with a single goal in mind: to help everyday investors generate outstanding returns and control their financial futures. Greg’s charts, analysis, and insights have appeared in Marketwatch, Forbes, Yahoo Finance, and many other financial publications. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your The Daily Reckoning subscription, you can ensure its arrival in your mailbox by [whitelisting The Daily Reckoning.](