Each of those 24 possibilities carries its own interpretative significance-- or insignificance. This is why it is vital even for a technical analyst to be very aware of the news.
Last week, I wrote that "I believe the market will react very strongly to any news that beats expectations and may even react strongly to in-line news, given the recent string of disappointments."
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaOVEjp_Tw5mQ25GoLLswtcMcTo8KUZyS9RFmC-t3HeGGCyGwCCdKkQ7R76u22ak1zG1_0NO6YqEt2uAWbjZ2vwNNhKhh3yQ25BYrhgQf5NnwDXJD9nQs4KZl-bLhP5lOmnkt00w6Z-kun/s320/6.14+news.png)
Above is a 5-minute bar chart of one day of after-hours trading on the September S&P futures contract. The most recent strong green bar with very high volume was a reaction to the scheduled retail sales economic news release. These were the results, courtesy of Econoday and Bloomberg:
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGlL6cA8yIc8G8vqVWBH9RQ5DxSRmnW0vVucRmYNbh448OD7Knm0m77X3OBbDzyFzXZn2m_g6CfI5OD_XMyryl56yfrUUE-epi3NVYVRIcHQdCF5DrWafPzQ1ZaaK6erokPVHk3BjBPGrI/s320/retail+sales.jpg)
One may consider today's news a beat because of the upward revisions to last month's figures, but more than anything, this is in-line news. However, the market reacted strongly, shooting up 5 points after already being up 9 points in after-hours. This is one piece of the puzzle. The final piece is whether sellers use this opportunity of higher prices to sell, reversing the reaction, or if buyers, including short-covering, dominate, continuing the reaction.
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