More Market Noise? Just Turn Down the Volume

The markets are full of distractions.  As traders and investors it is hard to get away from the noise that tends to influence our decision-making.  After all, we seek to find the answers or some sort of explanation, reasoning or rationale for market moves.  Somehow we feel relieved to know the 'answers', though they may not be accurate. 

What is some of the recent noise that may be affecting traders?  We can start with the uncertainties surrounding the coming election.  The chatter of course is about which candidate will be perceived as 'market and economy friendly'.  We can have different views of the outcome but frankly the discussion is not helpful for us in determining our investments (yet). 

We have also been hearing too much from central bankers, who seem to create havoc with currency and hence scaring up the crowd.  The latest noise is from the Bank of Japan and their sudden shift in policy (holding pat).  Further, the data from Europe and China has not been great but the spin doctoring of the numbers has our heads spinning.

The recent jobs number was considered a disappointment, the markets initially tanked but rose on that Friday to end at the high of the day.  If you bought into the 'talk' that a bad job report would be bad for the markets, you missed out.  Rather, the action was quite constructive, the markets oversold on a short term basis and due for a bounce.

 

What to do?  Well, we certainly have to consider the effect of this news and how the markets are reacting, but frankly the information is shallow and temporary.  The time-tested exercise of studying price and volume.  Pay less attention to the noise and distractions and more attention to what is happening in markets. 

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