The Edge

Why News Failures Matter When price ignores the headline,
the real story begins.

A news failure happens when price refuses to behave the way it "should" after a headline. If bad news comes out and a stock, commodity, or currency doesn't go down — or even rallies — that's a sign sellers may be exhausted. If great news hits and price can't go up, that's often a sign buyers are already fully committed.

In simple terms, news failures reveal when expectations are already priced in and the market is quietly turning. Instead of reacting to the headline, we focus on the reaction to the headline — because turning points often begin when price stops responding to news the way the crowd expects.

Real Results

News Failure Forward Returns

How prices moved after each detected News Failure from the WASDE report.

WASDE News Failures showing commodity surprise data and market reactions

Summary:   6 out of 10 wins — total P/L: +33.9%**

**Note: Position is being opened on the date of the News Failure at the closing price. The position is being closed after 6 months. The +6 Months column uses current price (Mar 4, 2026) as proxy. True 6-month dates haven’t been reached yet — elapsed time ranges from 1.7 months (Jan signals) to 5.7 months (Sep signals). Sep 12 signals are 8 days from their exact 6-month mark.

Date Commodity Signal Closing Price on NF Day +1 Week +2 Weeks +3 Weeks +1 Month +6 Months Trade P/L
Jan 12, 2026 Soybean Meal Bearish NF $294.60 291.60 (−1.0%) 294.30 (−0.1%) 294.50 (0.0%) 303.00 (+2.9%) 309.40 (+5.0%) −5.0%
Jan 12, 2026 Soybean Oil Bullish NF $49.82 52.56 (+5.5%) 53.89 (+8.2%) 53.20 (+6.8%) 57.05 (+14.5%) 63.47 (+27.4%) +27.4%
Dec 9, 2025 Cotton Bullish NF $63.86 63.10 (−1.2%) 64.01 (+0.2%) 64.32 (+0.7%) 64.46 (+0.9%) 64.16 (+0.5%) +0.5%
Dec 9, 2025 Live Cattle Bearish NF $226.83 231.15 (+1.9%) 228.83 (+0.9%) 231.18 (+1.9%) 235.28 (+3.7%) 238.53 (+5.2%) −5.2%
Dec 9, 2025 Feeder Cattle Bearish NF $335.50 343.33 (+2.3%) 344.63 (+2.7%) 349.55 (+4.2%) 362.48 (+8.0%) 360.85 (+7.6%) −7.6%
Nov 10, 2025 Cotton Bullish NF $64.31 62.36 (−3.0%) 61.44 (−4.5%) 62.83 (−2.3%) 64.12 (−0.3%) 64.16 (−0.2%) −0.2%
Nov 10, 2025 Wheat Bullish NF $535.75 544.25 (+1.6%) 522.25 (−2.5%) 530.25 (−1.0%) 531.25 (−0.8%) 567.75 (+6.0%) +6.0%
Nov 10, 2025 Corn Bullish NF $429.75 434.75 (+1.2%) 423.75 (−1.4%) 432.75 (+0.7%) 434.75 (+1.2%) 443.75 (+3.3%) +3.3%
Sep 12, 2025 Cotton Bearish NF $65.19 64.94 (−0.4%) 63.95 (−1.9%) 62.86 (−3.6%) 63.59 (−2.5%) 64.16 (−1.6%) +1.6%
Sep 12, 2025 Sugar Bearish NF $15.79 15.46 (−2.1%) 15.87 (+0.5%) 16.47 (+4.3%) 15.61 (−1.1%) 13.71 (−13.2%) +13.2%
Wisdom

What the Market Wizards Say

The greatest traders in history have recognized the power of news failures.

Market Wizards by Jack D. Schwager
"When the news is wonderful and a market can't go up, then you want to be sure to be short."
Michael Marcus Featured in Market Wizards
The New Market Wizards by Jack D. Schwager
"Bad news was starting to lose its impact on the market — bearish news stories would come out, and stocks would essentially lie flat."
Victor Sperandeo Featured in The New Market Wizards
Unknown Market Wizards by Jack D. Schwager
"But if they are all super bearish, and some really negative news came out that day, but the market closes higher, I'm buying."
Jason Shapiro Featured in Unknown Market Wizards

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