Fundamentals of the Sentient Approach to Financial Markets
The Story Every Financial Media Outlet Tells You
Turn on any financial news channel, open any trading app, or scroll through market updates, and you’ll see the same narrative repeated endlessly:
“Bitcoin Hits Record High $109,500 on U.S. Regulatory Clarity”
The story seems simple: regulatory clarity happened, Bitcoin soared. Cause and effect, right?
But here’s where it gets interesting…
The Plot Twist That Changes Everything
Just three months earlier, the same outlets were telling us a completely different story:
“Bitcoin Price Plunges Despite Pro-Crypto U.S. Government”
Wait… what?
The same fundamental factor—supportive U.S. crypto policy—was credited with driving a price surge in one headline, while in another, prices collapsed despite this very same positive policy environment.
This isn’t an isolated incident. It’s the norm.
📊 The Evidence Is Overwhelming
Our research compiled over 20 recent examples across major markets—Gold, Oil, Bitcoin, S&P 500, EUR/USD, and more. In every single case, we found contradictory headlines within weeks or months of each other:
| Asset | Contradictory Claims |
|---|---|
| Gold | “Holds steady as Fed flags inflation risks” vs. “Glow fades as inflation cools” |
| Oil | “Prices up 3% on geopolitical tensions” vs. “Slides 2% on same tensions fueling recession fears” |
| Copper | “Rises amid US-China trade truce” vs. “Drops sharply after trade deal bounce” |
The pattern is clear: The same fundamental factors are credited with driving prices up in one context, while prices mysteriously fall despite those very same positive factors in another.
→ See all 20+ documented examples with source links here
Contradictions
At various times positive fundamental factors can be:
- Credited with driving prices higher (cause and effect)
- Present but ineffective when prices fall despite them (the “mystery” of why good news doesn’t prevent bad outcomes)
Supportive policies, positive economic data, or favorable conditions are sometimes given credit for rallies, but other times those same positive conditions are present while prices inexplicably decline, leaving analysts scratching their heads about why the “good news” didn’t work as expected.
This highlights the absurdity of cause-and-effect narratives where the same “positive” factor can coincide with completely opposite market outcomes.
💡 The Revolutionary Insight
Here’s the groundbreaking realization at the heart of the Sentient Approach:
There is NO direct cause-and-effect relationship between news events and price movements.
This isn’t just contrarian thinking—it’s market reality. And recognizing this truth can transform your approach to investing and trading.
Why This Matters for YOUR Portfolio
Whether you’re:
- Building wealth for retirement 📈
- Day trading for income 💻
- Managing institutional capital 🏦
Understanding this principle protects you from one of the most expensive mistakes in finance: making investment decisions based on news narratives.
The Double Problem
The challenge isn’t just that news doesn’t directly cause price movements. It’s actually worse:
- News events don’t reliably predict price direction
- We can’t predict news events in advance anyway
So even if the relationship were reliable (which it isn’t), we’d still be trying to trade on information we don’t have until after the fact.
What Actually Drives Prices?
If not news, then what? The answer lies in understanding market cycles—the underlying rhythms and patterns that truly influence price action.
“It is the cycle analysis that provides true insight into how and why prices are moving, and that is where our time is best spent, identifying profitable trading opportunities.”
Your Next Step
The next time you catch yourself thinking:
“I can’t buy this stock because of that economic report…”
“I should sell because of the geopolitical situation…”
“The market will crash because of the election results…”
Stop.
Dismiss that thought and focus instead on what provides actionable insight: the cycles influencing price action, not the fundamental events that don’t.
What’s Coming Next
This is a fundamental principle of the Sentient Approach to financial markets. In our next post, we’ll dive deeper into how this understanding transforms your trading strategy, moving from the macro view to specific techniques for individual market opportunities.
The old way: Chase news stories and hope for the best
The Sentient way: Follow the cycles that actually drive price movements
Ready to revolutionize your approach to the markets? This is just the beginning.
About the Sentient Approach: A systematic method for understanding financial markets that focuses on cycle analysis rather than fundamental narratives, providing traders and investors with actionable insights based on market reality, not media speculation.
