Financial Journalist Analysis In Action
Yet when oil prices fell sharply today (after weeks and months of rising prices), clueless financial journalists attribute it to.... worries about the subprime mess. While I am certainly not a believer in efficient market hypothesis, even fund managers aren't that slow in catching on. The real reason for the sell-off was that some fund managers became worried that oil was over-bought and then after some started to sell, mass psychology prompted other fund managers to go with them. The price decline was only about a dollar early in the day, but more than $3 by the end of the day after bearish sentiment spread. We saw a similar, but opposite movement in the stock market, with the market rising at first only moderately, but as the Dow and S&P 500 broke through the +1% barrier for the day, mass psychology caused bullish sentiment to spread and the S&P 500 ended up 2.4%.
This again illustrates why the analysis of financial journalists are unreliable (with a few exceptions). Just study the raw data they provide and then ignore their analysis which are all too often clueless.