Got a theoretical question for you all. Let's say OPEC were to announce an oil production increase of x million barrels. We would expect oil prices to drop in the future and we would also expect more expensive pumping processes (i.e. deep water) to be shuttered due to an inability to make profit given the existing prices. The likely opposite would of course happen should OPEC announce production cuts (and hopefully follow through with them). If I own company x and I understand how OPEC actions affect x's business and if I also have correlated past OPEC events with x's stock price movements, am I not able then to buy, sell, rebuy, and resell based upon new OPEC driven events and therefor increase my profits? Would this strategy have a better or lesser likelihood of success versus looking for chart patterns and so forth? I agree with the buy and hold crowd that successfully timing the market as a whole is pretty unlikely but I would think that a fundamental understanding of sector drivers would allow you time specific companies or even a sector as a whole.
In this particular industry as a example I use OILPRICE.COM to track the crude,ng prices. It shows the entire market structure 24/7. There are many other ways. Charts do not lie, they tell the story and are used by the MAJORITY to help predict the future. News related events are a very helpful tool. When the pipeline was canceled, it was " or should have been" obvious how the price of oil would react. That was a news related event. There is no one way to observe, using the many tools in the box will give someone a better advantage. Sector rotation is a well known fact. DRIP plans are a good way to increase your share structure if you don't want cash dividend payments.
Reacting to news isn't market timing. It's taking a position based on price movement that is reacting or likely to react to that news. For example, a hurricane taking out oil production in the Gulf states. The California fires decimating some utilities. It can also be based on expected news. For example, pending legislation that might affect the earnings of a sector. For example, the pending passage of Obamacare, pollution restrictions on auto manufacturers (and conversely, the benefit to companies that make vehicle anti pollution equipment). Chart patterns arise from arbitrary price movement with the hope that price subsequently moves in that direction. News is something that actually drives price. AFAIC, news trumps patterns and indicators.
