It is an infinite discussion on various blogs and message boards – should the investor trade strictly on charts or should he take the news into account as well?

To answer the question I will give just one example. I remember that back in Summer and Fall of 2006 I’ve read couple of “news” that the subprime mortgage problem is a complete mess and will led into substantial losses across the banking system (at that time the term “subprime” was not very popular, usually those articles were talking about just mortgage-backed CDO market). I can’t say that I’ve paid too much attention to those news back then. The first subprime-related minor market panic happened in late February 2007 and first real panic in August 2007.

So sometimes it takes from 6 months to a year before the news articles you’ve just read will affect the stock market. You may suffer too many losses before the market will start pricing in the news.

So my answer to the question is: the question is incorrect. It is unclear what is news and unclear what is tradeable. If you are aware that the market will take a while to digest the news then yes, they are tradeable. But if your time horizon is only days or months then no, you have to stick with the charts