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Enter the Twitterati Citizen Journalist
Did the BBC do any investigative checks ahead of inviting a 'Financial Expert' on to the programme to discuss financial matters about the economy? Why would they?

Twiiter Power
Twitter Power

It was only after the tech savvy ‘citizen journalists’ of the social media Twitter community turned on Mr Alessio Rastani that the traditional media began to look into the qualifications of the BBC's 'Financial Expert'. Soon after, the national press reported that Mr Rastani had promptly denied being a financial expert and reportedly professed “I am just an attention seeker...a is a hobby..”

Nevertheless, Mr Rastani is not to blame in my opinion. He was presented with an opportunity, to reach out to an audience of the masses with his genuine thoughts and concerns, and he took it and I give full him credit for that - more power to him. Furthermore, the reporter or news presenter is usually not to blame since they are oblivious to fact that they are, at times, being tactfully manipulated like puppets; ready to pass on the fodder that is designed to hoodwink the unwary lambs (uninformed traders, see laggards). It is the lambs that only have themselves to blame for not seeing the mainstream 'news' for the fodder that it is and as W.C. Fields famously said, "It is morally wrong for a sucker to keep his money".

Regardless, online news website comments, blogs, twitter streams, facebook walls were ablaze with pleas from the public, petitioning the BBC's 'Financial Expert' to save them from the oncoming financial apocalypse that he had forcasted on the news. A number of traders had commented how they had begun closing their Long positions and opening Shorts as a result of what they had heard on the BBC News programme that day. So what happened in the financial markets subsequently after those infamous statements of doom and gloom? Let us have a look at an emini S&P 500 ES Futures chart of the weeks and months that followed:

Fig. 1 Chart showing upward move after Alessio Rastani's TV appearance
Chart showing upward move after Alessio Rastani's TV appearance
Chart courtesy of our trading platform partner, NINJATRADER®

Looking at the emini S&P 500 ES Futures chart (the turquoise horizontal line represents the price level at which the comments were made) above, any short-sighted laggard trader that blindly attempted to take immediate advantage of the news hype (e.g. by closing a long position or opening a short position during the subsequent week following the week of the remarks) would have been out of pocket soon after (with the exception of informed day traders) and rightly so.

Traders could have gained valuable information if they had entered the market prepared with the following information:

  1. Employed multi timeframe analysis to determine the direction of the higher timeframe trend.
  2. Identified KRAs.
  3. Examined Order Flow and/or Order Flow Divergence for trade execution confirmation.
  4. Gauged the market sentiments for imminent economic data (e.g. Unemployment Claims etc).

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