Hi y'all!!
JP Morgan released their report thursday with better-than-expected results. Citigroup released theirs Friday with also better-than-expected results. So... stock prices should be sky high right? .. WRONG. It is true that the news and the financial data (fundamentals) affects the market price of a stock but lets not forget that the market is still the market. A market is composed of people who wants to trade and prices are determined by what a person would buy at a certain price and what a person would sell at a certain price. If they don't meet then there's no trade. If they agree on a price and execute the trade then the market price changes. This is the basic rule and we should not forget it otherwise we can be heading for a down fall.
As proven this week, even though the fundamentals went up the stock prices still went down. This is because people are still uncertain of what will happen next. In this scenario, many people wanted to liquidate their shares for their own personal reasons which dragged the price down. We, as traders, usually doesn't have any control over this but we are able to predict this kind of situation or just simply mitigate the risk attached to it by, of course, selling our holdings.
But at the end of it what will happen? I really don't know. Although, prices will definitely go up but the question is as to when it will happen or if it will go down first again and just rise back again..
It's a risk. A risk we take. It's a game. A game of real life. And.. It's up to You if you want to Play. :)
Cheers everyone!! :)
JP Morgan released their report thursday with better-than-expected results. Citigroup released theirs Friday with also better-than-expected results. So... stock prices should be sky high right? .. WRONG. It is true that the news and the financial data (fundamentals) affects the market price of a stock but lets not forget that the market is still the market. A market is composed of people who wants to trade and prices are determined by what a person would buy at a certain price and what a person would sell at a certain price. If they don't meet then there's no trade. If they agree on a price and execute the trade then the market price changes. This is the basic rule and we should not forget it otherwise we can be heading for a down fall.
As proven this week, even though the fundamentals went up the stock prices still went down. This is because people are still uncertain of what will happen next. In this scenario, many people wanted to liquidate their shares for their own personal reasons which dragged the price down. We, as traders, usually doesn't have any control over this but we are able to predict this kind of situation or just simply mitigate the risk attached to it by, of course, selling our holdings.
But at the end of it what will happen? I really don't know. Although, prices will definitely go up but the question is as to when it will happen or if it will go down first again and just rise back again..
It's a risk. A risk we take. It's a game. A game of real life. And.. It's up to You if you want to Play. :)
Cheers everyone!! :)
