Perhaps the most common maxim of the stock market is that you buy on rumour, sell on news.

It’s also the most preposterous.

Frankly, it hardly ever works anymore, especially with positive news that isn’t earnings news.

A few years ago, it worked like magic, with mouth-frothing day traders creating a hair-raising, take-no-prisoners market that was a virtual rumour mill.

If the ruthless and blustery rumour-driven market of a few years ago was a Mike Tyson market, what we have now could be characterized as the Dale Carnegie market.

Most certainly, it is a kinder and gentler market. The beauty of it is that it is so mannerly that it waits for you. It’s a market that is afraid to play the rumours if there are any to play. Insider leaks that drive stocks pre-news also seem less common.

Based on the recent good behaviour of Canadian stocks, it’s a buy-on-news market, which makes us wonder if the hard-core day traders who fuelled the tech bubble of ’99-2000 have lost their nerve or what. Or are there any left still standing?

This is a market that even shows compassion for slow computers and bungling traders who tap the wrong key in haste while filling out the trade to close the deal on an online trade.

Even if your online broker tells you that you have insufficient cash to make a trade because you’ve inadvertently tried to buy a million shares instead of 10,000, this market is considerate enough to allow you to drop the ball a couple of times and still provide a decent entry point.

Mr. Magoo could make a killing in this market.

After news breaks, the market lets you pause to help an elderly lady across the street and you still have time to catch the train before it leaves the station.

When Certicom (CIC-TSX) announced recently that it had secured a contract with a U.S. government security agency, there was no rumour and little pre-news buying action. Obviously, the insiders were quieter than church mice pre-announcement. When the stock resumed trading after the halt for the news, the shares gapped up from $1.50 to $1.90 and quickly spiked to $2.50.

But if you practised some patience, you could have gone out to lunch, bought on a pullback at $2.10 and then watched it roar to $3.13 by the Friday closing bell. If you didn’t buy Certicom until the Monday opening at $3.49, you still scored a big win as the stock closed Monday at $4.

Aside from the usual runups prior to earnings announcements, I can’t think of a single stock lately that made a significant move in advance of a major positive news release.

The day before Producers Oilfield Services (POS-TSX) announced that it had acquired an interest in an oilfield waste disposal facility, the shares traded flat on volume of 3,600.

On the news, the stock rallied from 95 cents to $1.10 on 175,400 shares.

An obscure TSX-listed company named Electrovaya (EFL-TSX) announced in early October that it had landed a contract with NASA to supply the power systems for space suits. The stock was flatter than a pancake the day before the news, trading only 81,000 shares. On the day the news came out before the opening bell, the stock moved from 38 cents to 83 cents but it was more than accommodating, moving at tortoise’s pace. If you arrived at the party late, you still could’ve bought the stock at 50 or 60 cents.

Yangtze Telecom (SMS-TSXV) made a monster move on news of a contract in China, but the stock was virtually comatose on the trading day preceding the news, trading 2,000 shares at 84 cents.

On the news release prior to the open, it ran to $1.55 on 174,700 shares on the first day but traded as low as 90 cents during the day. You had time to go out for breakfast in a rickshaw and eat your oatmeal with chopsticks before taking a position.

In fact, volume was even higher the second day after the news when the stock almost doubled, racing from $1.55 to $2.95.

No doubt, once the market turns cheeky and brash again and starts to swagger mightily, you may be buying the rumour and selling the news again before too long.

But, for now, relax and enjoy the respite. Kick back a little. Take a rickshaw out to breakfast and leave your Blackberry at home.



HOT STOCK: YANGTZE TELECOM
SMS-TSXV $2.84
Up $1.29 (+83.2%) on 1,380,600 shares (for week ending Oct. 31).
Three words. China. Contract. Cellphone. That’s the ultimate triple play when it comes to lighting a fire under your shares. Yangtze has a deal to provide China Unicom its mobile phone messaging system. It didn’t take long for investors to get their heads around this one.



COLD STOCK: AGNICO-EAGLE MINING
AGE-TSX $14.38
Down $4.04 (-21.9%) on 7,600,200 shares (for week ending Oct. 31).
Analysts need to get out more, don’t ya think? I mean, the street forecast the Eagle’s third-quarter loss at one cent per share, but the company sitting on the country’s biggest gold deposit somehow managed to lose 14 cents per share ($11.9 million), citing production problems, while the gold price was rocketing.