I have an exercise you can to perform this afternoon. If you are actively monitoring the markets when the FOMC minutes are released, then you should perform third reaction analysis.
This exercise is useful for three reasons. First, the reaction to the reaction’s reaction tends to be the short term tell for the market. I have no data to back up this analysis. One day I will back test this theory with a team of interns, smoking monkeys, or robots operated by smoking interns.
Second, it forces you to slow down your thoughts as the market moves fast. That is, if the market moves fast. Third many of you, piker as it is, love inserting your p&l into your analysis. Put it away, and make an earnest attempt to identify the first, second, and third reactions to the data.
Feel free to share your observations below, it won’t upset me in the least.
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Number 3 will win again.
🙂
you had me with team of interns.
v-cut blouse, short skirt interns?
see updates
*golf clap*
first reaction, sell, second reaction, buy, third reaction pending…
leaning a buy as the 3rd.
thanks for your observation
Looks like more of a “Meh” status quo maintained for intermediate term
seems very “Meh” agreed, has me wondering if I am spinning my wheels a bit…I closed a few longs
third reaction is sell, sell wilco wilco
are you sure the first reaction was sell?
not really, flip flopped on it a few times
the interns have us all messed up. what would r kelly do?
sell and drink a clamato
Some buying into the close, but definitely no conviction movement in the markets
The correct reaction:
1. Don’t stare at screens all day long, watch CNBC or post on StockTwits etc.
2. Don’t day trade
3. Don’t trade just to be trading
4. Buy on dips and hold
Winner
Nice.
I day trade tho, it’s sort of what I do