Breaking News and Catalysts

Not all news moves stocks, and not all moves have news. A useful catalyst changes expectations about a company's future cash flows — earnings surprises, FDA approvals, major contracts, or buyouts. Headlines about price targets or social media buzz usually fade within minutes.

When news breaks, read the actual source, not the headline summary. A $2 million contract for a company with a $10 million market cap matters; the same contract for a large cap does not. Check whether the move started before the news — if the stock was already up 80% before the headline, you are likely late.

The most dangerous habit is chasing a headline spike. By the time you see it, feel excited, and click buy, the early buyers are selling into you. Wait for a defined setup — a pullback, a halt resumption, or a VWAP reclaim — instead of buying the vertical candle.