| | | | Over the past two days, I’ve broken down how mainstream financial media is misleading you…
First by showing you how the Nasdaq Composite isn’t as meaningful as the Nasdaq 100…
And then by explaining how they talk about the Dow often paints a distorted picture of the market.
Today, let’s tackle another major problem with how financial news presents information: the obsession with comparing prices to yesterday’s close.
Let me explain why that bugs me so much.
When you’re watching CNBC or watching one of those other talking head type financial shows, the numbers you hear are almost always measured against where the market closed yesterday.
And that’s fine if you just want to know whether the market went up or down since the bell rang yesterday afternoon. But as a trader, I need to know a whole lot more than that.
Comparing prices to yesterday’s close is like looking at the end of a race and ignoring everything that happened before the finish line.
Sure, you’ll know who crossed the finish line first, but you’re missing the part that matters most: how they ran the race.
For me, and for other traders, the important question isn’t “What happened since the close?”
It’s “What’s happening right now, since today’s open?” That’s where the real story starts to unfold.
The open price is what tells you who’s stepping into the market and making moves — buyers or sellers. Are people rushing in to buy right out of the gate?
Or are they hitting the sell button as soon as the market opens? That’s the kind of information that helps traders make decisions.
Why does this matter so much? Glad you asked!
Well, think about it: most of the time, the close price reflects what was happening late yesterday.
By the time today’s market opens, sentiment could have shifted completely.
A bad earnings report, a geopolitical event, or even a single major pre-market trade can change everything overnight.
But if you’re stuck looking at yesterday’s numbers, you won’t catch those shifts until it’s too late.
This is why I look at how stocks are moving in relation to today’s open, not yesterday’s close. It gives me a real-time pulse on market sentiment — who’s out there in force and what they’re doing: Buyers or Sellers.
Mainstream financial news rarely talks about this because it’s more complicated than just saying, “The Dow is up 200 points from yesterday’s close.”
But if you want to trade like a pro, you’ve got to start looking at the open.
So here’s the takeaway: don’t let financial news make you focus on the wrong things. The close is old news. The open? That’s where the action is.
And by the way, this goes not just for the day’s open.
But that’s why in my trading, I focus so much on the week open, the month open and the year open.
It tells me which side has been winning since the start of that race.
If you’ve got questions about how I approach the market — or anything else — drop a line to my customer service team at support@ProsperityPub.com and they’ll pass it on to me.
— Geof Smith
P.S. The weekly open is how I know which direction I’m trading in to target weekly income with my Four Day Play. Check it out right here. | | | | |
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