Ever heard the saying “buy the rumour, sell the fact”? Do you ever wonder why prices go down after a positive announcement? Do you think the Smart Money knew the facts or the good news beforehand and the reason why they’re already long?

When the good news is announced to the market all the weaker hands jump in and start buying, and the Smart Money takes the opportunity to offload their positions into the demand strength. Look at Kelington chart again (above). Prices were already trending higher. The Smart Money has already bought because they knew what was coming. When the announcement came they took their profits and sold their positions to all the latecomer.

You would have gained a +36% profit from the earlier 18 Line Change buy signal by following the footprints of Smart Money. Looking back at the chart, Smart Money have already accumulated since November 2017 mostly with low volume, narrow spread bar and almost no news during the period.

Disclaimer: This information only serves as reference information and does not constitute a buy or sell call. Conduct your own research and assessment before deciding to buy or sell any stock.