Trading Catalysts-How Events Move Markets and Create Trading Opportunities.pdf
Vice President, Editor-in-Chief: Tim Moore
Executive Editor: Jim Boyd
Series Editor: Robert I. Webb
Editorial Assistant: Pam Boland
Development Editor: Russ Hall
Associate Editor-in-Chief and Director of Marketing: Amy Neidlinger
Cover Designer: Solid State Graphics
Managing Editor: Gina Kanouse
Project Editor: Jennifer Cramer
Copy Editor: Kelli Brooks
Indexer: Lisa Stumpf
Compositor: Nonie Ratcliff
Manufacturing Buyer: Dan Uhrig
© 2007 by Pearson Education, Inc.
Publishing as FT Press
Upper Saddle River, New Jersey 07458
First Printing October 2006
ISBN 0-13-038556-5
Chapter 1: Introduction 1
Federal Reserve Rate Cut
Announcement 1
Analyzing the Market Reaction 8
The Nature of Trading Catalysts 10
Do Perceived Trading Catalysts Really
Influence Market Prices? 18
Trading Catalysts and Market
Efficiency 21
Trading Is a Game 23
Trading Off of Catalysts 24
References 28
Endnotes 29
Chapter 2: Market Conditions and Sentiment 33
Treasury Announcement Discontinuing
Issuance of 30-Year Bonds 33
Market Conditions, Sentiment,
and Trading Catalysts 40
Treasury Announcement of Potential
Resumption of 30-Year Bond
Issuance 46
Trading Lessons 54
References 57
Endnotes 58
Chapter 3: Talk Isn’t Cheap 61
Irrational Exuberance 61
Comments by Politicians and
Policymakers as Trading Catalysts 66
Chapter 9: Bubbles, Crashes, Corners,
and Market Crises 259
The Silver Corner 260
Internal Market Catalysts 271
The Crash of 1987 280
x CONTENTS
Asian Financial Crisis and Market
Contagion 294
Trading Lessons 295
References 297
Endnotes 300
Chapter 10: The Accidental Catalyst 305
The Large Cost of Small Errors 305
Lost in Translation 310
Dollars or Shares? 312
Trading Lessons and Summary 315
Market Conditions, Sentiment,
and Trading Theses 317
Trading Is a Game 319
News: Information versus Noise 319
The Origin of Trading Catalysts 321
Extreme Events 322
References 324
Endnotes 325
Index 327