[Nick1984]

I think people underestimate the "herd". The "herd" is always going to be a stronger force than any one professional or even a few professionals put together. If there's panic the professionals can try to stall it if it is in their interests but they can't do that forever. Knowing how to gague the mentality of the "herd" and take a position apporpriately is the holy grail! However we can't cause we're not psychics and we're not experts on group psychology.

Yes people will react badly to good news and visa versa. This is about as simple as it gets when it comes to trading off the news. You'll find that most credible economic news reporters often quote the expected figure prior to its release so you can make a game plan before a trade and then gague once the news is released whether the expectation has been met, exceeded, or unrealised.

Of course many people will say "I don't care about what the news is, I just care about how the markets react to it" and thats a valid enough oppinion however it can't hurt to have a small game plan based on reliable expectations data. Just always remember never to go in with a pre-conceived idea!