Mask Update ‘Baked In The Cake’

Hey Market Pilots,

Late last week the Centers for Disease Control (CDC) gave updated guidelines about mask requirements for vaccinated people. Clearly, this is good news and a big sign that we are making progress in the fight against Covid-19. But does the market care, or was this already baked into the cake?

We have seen similar news situations in the past where some headline “revelation” came out which should have been great for the market and the economy based on its opening up or progress to getting back on track. Yet, the market didn’t exactly react positively to it… perhaps because it was already assumed this progress would be made and it was just a matter of time.

The elimination of the mask mandate could be a similar “revelation.” On the surface, this should be incredibly good news and bullish for the economy. This would add energy to the market and in particular the sectors most needing Covid-19 to be a thing of the past. 

But don’t be surprised if it’s essentially a nonissue to the market. One, because we all knew this day would come as it was just a matter of time. And two, the market is a counterintuitive beast that likes to draw people into a narrative they think is new information, but really isn’t. Remember… “Buy the rumor, sell the news.”

So just be on guard about news headlines and how you react to them. Usually, by the time we hear about it, the market has already taken it into account.

This situation reminds me of when I first started trading and I would surf the news for leads on where to trade. I would see a headline about something good with a company, I would get in, only to then have it not work out because those in the know already positioned themselves for the news. And they sold their profits to me, the last in line to read it on the internet.
The charts will tell you everything you need to know.

Your Profit Pilot, TG

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