H Reddit Mentions | ChartExchange

As traders we rely on technicals - i.e. figuring out the correct levels of support and resistance on the market or a stock.
It gets more complicated when we start thinking about those levels across various timelines (e.g. the level of support on a stock intraday might be VWAP but on a daily chart it could be a SMA or a trendline). Going down the rabbit hole even further and one finds that not all levels of Support and Resistance are equal - some are clearly stronger than others.
Now I am not here to argue the importance of technical indicators - if you don't believe they matter then you are either not a trader or won't be a trader for long. They matter.
The price action of the market or a stock allows us to look at the price movement/volume as it navigates those various levels of support/resistance. We can then compare the relative strength of a stock to the market and with the use of scanners and good charting make informed decisions about our trades.
All of this is trading 101 - nothing new.
It also isn't a revelation to note that lines of S/R are broken all the time for various reasons. Sometimes a strong or weak market is all the reason one needs to blow past a SMA or trendline. The other reason a stock might break levels of S/R is....news. The most obvious example is earnings reports.
Black Swan events are an example of extreme news-related price action - they tend to be somewhat unexpected global news that can impact the systemic underlying financial structure many of these companies are built upon (e.g. Covid or Housing Collapse).
The Trump era in 2017 to 2021 and now in the present day has driven heavily "news-driven" markets. On any given day a tweet or news-release can completely reverse market direction. This obviously creates a lot of volatility.
Generally speaking, traders like volatility. But that needs a caveat - traders like volatility *that still maintain guardrails.* We enjoy rollercoasters because we know that we're not going to go flying off the rails - it is controlled volatility. Technicals are those guardrails.
The problem becomes when technicals start to lose their strength under the constant barrage of news. When we can no longer be assured that Resistance will hold while we are shorting something, or that Support will remain intact when we are long, the following happens:
\- We exit profitable trades quickly given the fear of a news-related reversal
\- Ironically, we also hold losers for a longer period because why should I close my long on a down day when tomorrow there will likely be a tweet that will boost the market?
As a result, more trades become gambles because why the hell not at this point, right?
Another problem is that traders, in general, are ill-equipped to correctly interpret the news.
\- Is this already priced in?
\- How unexpected was the news? Is this something that Institutions have already modelled a percent likelihood of occurring or truly a complete surprise?
\- How impactful is it? Is it impactful to the market as a whole? A sector? An industry? An individual company?
\- Will the impact last a long time or be short-lived?
\- Is there likely to be a remedy or a response coming?
\- How dependable is the announcement? Is it real?
So what can one do? Obviously asking traders to become experts on interpreting the socio-economic-political impact of news is not realistic. In fact, the questions above are meant to show just how difficult even trying to approach a "news analysis" method can be to even the most informed trader.
Still that does not mean ignore the news. Let's look at a current day example.
SPY is at $657 right now. It has resistance at $658.20 which is the descending trendline and it is also below the SMA 200 of $662.87. Given the daily chart on SPY, the breaks of the SMAs and the rejection of this trendline, if one were to look only at price action I would say this is a good place to swing short.
Another way to look at it is - the market has jumped $25 on SPY in the last five days off news the Iran war may be winding down and now it is holding just below the SMA 200 waiting for the final piece of confirmation that the U.S. involvement in Iran is indeed complete. In that case, do not swing short because any news-related announcement about the end of the war should be enough to send the market rocketing higher.
Same price action - two different conclusions. The first conclusion is pure price action based, the second one takes the news into account.
Price action tells us a story and the corresponding news provides the rough sketches of the plot. Understanding that plot can allow you to look at something like the current state of the market and go from a pure price action analysis of "short" to understanding the story which tells you to "wait".
It is more important to understand the story being told rather than trying to predict where that story is heading. And if you look at price action closely enough - you can usually see that story very clearly.
You need to ask yourself the following questions:
**First - Did the technicals hold?**
No matter what the news, even earnings, if the technicals are holding then the news wasn't impactful enough for the price action to make any real meaningful moves. Sticking with the example above - the market remains below the SMA 200. This should be interpreted as the news has not reassured the majority of the market liquidity enough to become bullish. If it had then that major technical line would have been breached.
**Second - If the technicals held, what is the trend (as the story will often lie within the trend)?**
Again, looking at the current example of SPY the overall trend is bearish but the past few days have shown sharp bullish moves towards the SMA 200. Even without knowing the news one could look at the chart and come to the conclusion that - News hit the market didn't like and sent it below the SMA 200. The market continued to drop as whatever drove it down had not yet been "fixed". The past few days have shown signs that the market is somewhat reassured but the problem still exists.
**Third - If the technicals are broken - are they broken with heavy volume?**
Is there continuation to that break the following day? Sometimes news-based moves will create price-action that "tests" major technical levels but that is all it is, a test.
Technical analysis is not made obsolete by news, it is refined by it. News provides the catalyst, but price action tells you whether that catalyst was accepted, rejected, or still being debated. That is why the most important skill is not prediction, but interpretation.
Because in the end, the question is never simply, “What was the news?”
The real question is, **“What did the market decide to do with it?”**
Best, H.S.

document.getElementById("HLLQKS").onerror = function(){this.style.display='none';}; .dark-mode .VGrsDb{ color: white; background-color: #333333; border: 2px solid white; }.light-mode .VGrsDb{ color: #333333; background-color: white; border: 2px solid #333333; }HHyatt Hotels Corporationstock NYSE

H
Hyatt Hotels Corporation
stock NYSE