Shadowtraders

CNBC -- The News Is Always Half Full

Every morning in the futures trading chatroom we watch CNBC in case there is some Market shocking news, like there was yesterday when the S&P announced that it had downgraded the US debt. That caused the Market to collapse over 250 points at its lowest point.

What is amazing about CNBC, is that they always talk about only good news never bad. Today, the day after the S&P announcement, their only comment was "the DOW and S&P have been up 4 out of the last 5 days". Never mind that the Dow was down 140 points yesterday. Lets look at what CNBC say is an up market...

Here are the close prices for the Dow for the last 5 days:
April 18 -- 12201
April 15 -- 12341
April 14 -- 12285
April 13 -- 12270
April 12 -- 12263
April 11 - 12381

From April 11 to April 18, the Market has been down 181 points
On April 12 it dropped 118
On April 13 it went up 7 points
On April 14 it went up 15 points
On April 15 it went up 66 points
On April 18 it dropped 140 points

So where is the up for the last 4 of 5 days that CNBC is talking about? What is the true reality...CNBC's sponsors are brokerages. If they told you the truth, that the Market is not doing well, smaller, individual traders would sit on the sidelines. So they make up stories about where the Market is going.

On April 1 the Market was at 12376, on April 18 the Market is at 12201. That is not an uptrending Market. To CNBC, the glass is ALWAYS half full. To the rest of the trading world, the glass is, best case, half empty. What CNBC should realize is that not everyone drinks Koolaid in the morning. They should learn to tell it straight instead of trying to sugar coat the obvious.

Yesterday, S&P downgraded US debt. Today China warns the US to protect its creditors (namely them) after the S&P warning. Yet both yesterday and today, all CNBC could say was that the warning from S&P was not important, meant nothing, was expected, was overdue, blah blah blah. And instead of talking about the Chinese warning, CNBC had a live interview with Treasury Sec Geithner who said that there was "no risk U.S. will lose AAA credit rating."

The warning from S&P means a lot. Investors are sitting on the sidelines right now. When the Market is going up the volume is very light. When the Market is coming down, volume is very heavy. On April 18, the total number of S&P Emini contracts (one of the biggest trading indexes in the world) traded nearly 2.3 million contracts. On April 15, when the Market was, according to CNBC, going up, the volume was 1.6 million, nearly 30% lower.

It would appear that CNBC needs to find some new advertisers so they can begin to tell the truth about the Market and its recovery. If they won't stop selling Koolaid in the morning, at least they should change the flavor once in a while.

Barbara Cohen CIO, Shadowtraders, and professional day trader, specializes in teaching students how they can be trading futures with their own trading system and trading strategies. Ms. Cohen has helped hundreds of traders achieve their goals trading. Find out if trading futures is for you by attending one of Ms. Cohen's free webinars. Check out my Futures Trading Articles For more information, send an email to shadowsupport@shadowtraders.com or call 866-617-2037 today.

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