You probably know by now that following the news is an important part of your trading. But what you might not know is exactly how time sensitive the news can be. This is especially true when the Federal Reserve makes a decision, or even hints at the fact that they are in the process of making a decision. For example, the mere fact that the Fed is currently trying to decide about what to do with stimulus payouts has recently caused stock futures to jump up dramatically in price. It makes sense if you think about it: more money in the economy helps companies because more money is pumped back into them, both through consumer spending and more stock investments. And when futures begin to attract more attention, oftentimes real time prices are not too far behind.
This is where the common investor can take advantage. Most people do not utilize stock futures, but paying attention to them is extremely important because it is a reflection of long term sentiment. (more…)