Yesterday morning, I wrote an article about trading during news releases. The article is a discussion of the unexpected volatility that news releases can cause, and whether traders (especially day traders) should ignore news releases, or make sure that they are flat (i.e. no active trades) during news releases.
Yesterday afternoon, the relevance of the article was made prefectly clear, when world markets experienced a sudden increase in volatility due to a news release. The new release was the US Consumer Confidence at 2:00 PM (Greenwich Mean Time), and the result of the news release is shown in the following chart of the NQ futures market (click on the chart to view it in full size):
The sudden volatility was not caused by any underlying change in either market behavior or direction, nor by any fundamental change in any of the world's economies. The sudden volatility was only caused by the reaction to the news release. If the news release had not occured, then the chart would look completely different.
If you do not yet know whether you can trade through news releases or not, my article about trading during news releases can help you figure this out, and my weekly economic calendar specifically highlights the news releases that are expected to cause unexpected volatility (they are shown in bold).
SPY, DIA, the Q’s showed no reaction at 2PM (ET)but all made their move by 10:15AM. How does that connect with your chart of futures?
As noted in my blog entry, the news release was at 2:00 PM Greenwich Mean Time. This is the same time as 4:00 PM Central European Time (as shown on the chart), and 10:00 AM Eastern Time. Therefore, any charts that are set to use Eastern Time (as you mentioned in your comment) will show the reaction to the news release from 10:00 AM onwards.