I noticed something a long time ago and then I decided to do a little research on it. I noticed that stocks often go down after purchases, so I wanted to find out. The market looks like a manipulated country where there are people who know the secret information and there are people who are never late.
The news about a project often brings excitement to both buyers and sellers and when it comes to stocks, there are people who want to buy when there is news either good or bad, and there are people who want to sell when there is news, either good or bad. Never forget that in the market, there are big boys and when it comes to the stock market, the big boys are the hedge funds.
They have access to insider news, tools and funds to trade on stock so for instance if there will be news about a company's success which will bring in more investors in a week time, hedge funds would have known, thanks to insider news and then they start to buy this stocks or they start to long it just before the news get to the public. When you are hearing the news that triggers your emotions to buy into the stocks, then you are already late.
Euphoria is often common when companies already made the news but as usual, retail investors and traders like ourselves will still be willing to buy into the stocks but then some people will get tired, the market makers could decide to stop the party.
I then realized that both hedge funds and retailers are buying and selling, the difference is that the big traders and investors know when to buy and when to sell, but we are often late to the party.