As an example, lets take a look at what happened on Tuesday, which was a very important day for both the Nasdaq and the semiconductor sector. This is because Xilinx, a leading semiconductor stock, reported that their earnings would be on target with the previously stated forecasts, and that the inventory buildup in some semiconductor equipment had started to decline. This was all investors needed to hear. Everyone knows by now that things are bad in the economy. We are in an economic contraction, and various sectors of our economy are in a recession.
Investors expect to hear that things are bad.
It seems like this was all we needed to hear. For day traders, it was fairly obvious that the odds favored an upside move on Tuesday. The stochastic oscillators were giving strong upward signals. The futures were higher, and the QQQs opened on the upside. Tuesday was one of the few days in which traders who bought at the open could have taken a profit later on.