From Headlines to Hard Money: What Moves Markets First
Editor’s Note: Every so often, someone shows me something that genuinely changes how I think about markets.
Jonathan Rose is one of those people.
He spent nearly three decades trading at the highest levels – from the floor of the Chicago Mercantile Exchange to market maker at the CBOE. He’s seen every hype cycle, every crash, every “this time is different” moment. And he’s profitable through all of it.
His edge? He positions before expectations shift – not after.
Right now, he’s using a new class of probability-based signals to identify setups most investors won’t see coming. In the piece below, he explains exactly how it works and why it matters more in today’s market than ever.
Read on. Then watch his presentation. I think it’ll change how you look at every trade you make this earnings season.
In 1602, investors were speculating with their money on long, perilous sea voyages associated with the spice trade.
A storm could sink a ship.
A ship could return with less cargo than expected.
Or, even worse, two ships could return at once, flooding the market and crushing prices.
The Dutch East India Co. was one of the world’s first multinational corporations – and one of the first great engines of speculation.
Back then, investors didn’t have stock charts, earnings models, or algorithmic tools. They had rumors, expectations, and whatever conviction they could muster.
Fast forward 400 years, and the tools have changed. Human behavior hasn’t.
Traders still react to narratives. They still chase stories.
But modern markets don’t move on stories alone.
They move on probability.
And right now, a powerful probability engine is shaping the next wave of market moves, whether most investors realize it or not.
These real-money probability signals are often more reliable than analyst forecasts…
And I’m going to show you how I use shifts in belief, before prices adjust, to identify high-probability setups in individual stocks.
Because when you understand how expectations form, and how they break, you stop reacting to headlines.
You start positioning ahead of them.
Why Smart Traders Stopped Watching the News
In my 28-plus years as a professional trader – from the floor of the CBOE to running capital at a bond prop firm – I’ve seen hype in every form imaginable.
I started trading near the peak of the dot-com boom. Retail investors chased names like eToys and Pets.com based on headlines and momentum. But on the floor, we weren’t trading the headlines.
We were trading positioning.
We watched how institutions were allocating capital… how expectations were being priced… and where valuations had detached from reality. That’s where the real profits were made.
I found similar setups during the Great Recession, the COVID crash, and the bond collapse of 2021.
The lesson hasn’t changed: Markets move when expectations shift – not when the headlines hit.
And over the past year, a new force has started accelerating those expectation shifts… combining retail speculation with actual gambling.
I’m talking about prediction markets such as Kalshi and Polymarket.
These platforms allow participants to trade contracts tied to real-world outcomes – policy decisions, economic data releases, elections, and other high-impact events.
Unlike traditional commentary, these markets reflect real money positioning. Participants aren’t offering opinions – they’re committing capital based on how likely they believe an outcome is.
And that distinction matters.
Because prediction markets don’t wait for headlines. They price probabilities before the news breaks.
When those probabilities begin shifting – even subtly – it signals that expectations are changing beneath the surface of the broader market.
And when expectations shift before stock prices fully adjust, opportunity tends to follow.
How Prediction Markets Price Reality Before the Headlines Do
Kalshi and Polymarket have existed for years. But 2024 is when they became impossible to ignore.
Take the U.S. presidential election.
While most Americans were consuming media narratives shaped by whichever end of the political spectrum they preferred, prediction markets were pricing probabilities in real time.
If you were watching Polymarket closely, President Donald Trump’s odds climbed decisively well before the final votes were tallied. Capital was flowing in one direction – and it wasn’t subtle.
Yes, one deep-pocketed French trader with about $30 million in Trump wagers was the biggest winner when the dust settled. But that’s precisely the point. These markets reflect conviction backed by capital – not commentary.
And it’s not limited to elections.
When speculation began swirling around the next Federal Reserve Chair, odds on Kalshi shifted rapidly after key political signals emerged.
The probability moved first. The broader narrative caught up later.
When the Money Moves First, the News Follows
We’ve seen the same dynamic throughout the past year. Tariff headlines. Policy pivots. Trade negotiations. Each “news bomb” hit stock prices fast, but prediction markets were already adjusting probabilities beneath the surface.
If you want the fastest signal on rate cuts, trade deals, or sector rotations, it’s rarely the press conference. It’s the money positioning ahead of it.
That’s what I mean when I say these markets are “rigging” the game.
They’re not manipulating outcomes.
They’re revealing expectations before the rest of the market fully digests them.
And when expectations move first, prices usually follow.
And prediction markets don’t just illuminate politics or macro shifts. They also help us spot major shifts in global capital before they fully ripple through stocks.
Right now, several large economies are reducing their exposure to U.S. Treasuries. That may sound like dry macro trivia. It isn’t.
When major buyers step back from U.S. debt, it affects currencies, interest rate expectations, and risk appetite across global markets. And those shifts eventually spill into stocks – sometimes abruptly.
Here’s the key: Traditional headlines often lag these transitions. But probability markets begin adjusting almost immediately.
When expectations around rate cuts, trade agreements, or currency strength start moving in these markets, that’s an early clue that institutional positioning is changing.
You don’t need to trade bonds or currencies to benefit.
You just need to recognize when a broad belief shift is underway, because that’s when pricing gaps begin to form across sectors and individual stocks.
That’s the framework my members and I have used repeatedly over the past year:
- Identify where expectations are drifting…
- Find where stock prices haven’t caught up yet…
- And position ahead of the adjustment.
The real edge isn’t predicting macro headlines.
It’s recognizing when belief has already started moving.
Finding the Gap: Where Probability Moves First
Prediction markets do privilege traders with the best intel.
Just look at the trader who reportedly put tens of millions behind a single election outcome. That kind of conviction doesn’t come from guesswork. It comes from positioning.
And that’s the dynamic taking shape right now. The most informed, best-capitalized players are constantly expressing their expectations in real time.
Most retail investors can’t compete in those arenas directly.
But here’s the good news: You don’t have to.
Because the traditional stock market gives us something even more powerful – leverage.
We don’t need millions riding on a political outcome. We just need to recognize when belief shifts before stock prices fully adjust.
Prediction markets become our early warning radar.
When probabilities move, but price and volatility haven’t caught up yet, that gap becomes actionable.
That’s where opportunity lives.
Why Earnings Season Is When This Edge Is Most Powerful
Earnings season is where this strategy really shines.
That’s when expectations collide with reality. When analyst forecasts meet hard numbers. When hype either gets validated – or breaks.
And when expectations are even slightly misaligned, stocks can move violently.
So far this season, we’ve already captured multiple double- and triple-digit percentage gains by focusing on one thing: Real money flow, not headlines.
We look for moments when institutional positioning and probability signals start to diverge from consensus expectations. Then we structure trades around that gap.
I’ve already used these earnings season signals to identify rapid moves in stocks like:
- Sunrun Inc. (RUN), 151% in two days.
- BHP Group Ltd. (BHP), 189% in 17 days.
- Alphatec Holdings Inc. (ATEC), 213% in two weeks.
- Fastly Inc. (FSLY), 300%+ in just over a month.
- Snap Inc. (SNAP), 375%+ combined in about two months.
During this quarter, my closed trades are running at a 60% win rate, with an average return of 85.76% over roughly 31 days.
That’s the repeatable edge we exploit.
And right now, another setup is forming at the intersection of prediction-market probability shifts and under-the-radar earnings catalysts.
In a new presentation, I’m walking through three high-conviction opportunities developing in sectors most investors aren’t paying attention to yet.
If you want to understand how this belief-gap framework works in real time, and how to apply it during one of the most important earnings stretches of the year, I encourage you to watch it.
In the 17th century, traders had to wait months to learn whether a voyage paid off.
Today, belief moves instantly.
And the trader who reads that shift first doesn’t gamble.
They position early.
