Macro overlay to technicals

Discussion in 'Strategy Building' started by nzbryant, Jul 22, 2006.

  1. Hi

    Let say you have a technical system - whether it is breakout, or oscillation focused, and news comes out on a commodity or stock. Do you adjust your trades based on the news?

    An example: Lets say you traded oil and your technical system was flat - maybe you had just reached your profit target. The recent action in the Middle East occurs - would you go long again based on the news/fundamentals?
     
  2. I think they go well together- at least you know why the technicals are taking shape in that case but I'd probably wait for some sort of technical confirmation - I regularly look to the economic data that comes out weekly and crude stock inventories and so on , i don't think they should be ignored- their trends are important. The initial news releases are the most critical i find , as the story gets older the headlines seem have less of an impact in many cases.
     
  3. Perhaps you could look at it this way:

    The fundamentals might give you confidence that a trend should take place but you'd be smart to wait for technical evidence that your view of the market was shared by the other participants.

    Its surprising how often the technicals have preceded the fundamentals though ... someone else seems to get the news first :)