Marketgems Earnings Trader- Trading Strong or Weak Earnings Growth

[jenna]

Volatility..that's especially true when sector rotation is an important part of our stock selection process. We like the semis as well as the next trader, but will try to find where the 'money is flowing in - positive money flow' and where its flowing out - negative money flow' as well. Today we had some good gains from BUD, CAKE, WMT, COH, but LEH wouldn't cooperate. LEH chart looked pretty good ONLY ON A TECHNICAL analysis level for a potential recovery, but this proves there is a lot more to the rally or pullback than a simple candlestick, tic toc toe, or Eliot wave or worse yet an astrological cycle chart!!

Banking and financial services were 'hit' today so no 'technical analysis' alone will zoom in on that and certainly no "artificial intelligence" scanning. Simply also LEH had a no earnings coming out so there was no real volatility that we could have anticipated in advance. For us or any newsletter service to "guess" at which sector will be strong the next day, even the most classic 'buy set up chart pattern' would leave us at a distinct disadvantage and put us in the same genre and a clone of every service out there.

By concentrating on 'earnings plays' 85-90% of the time, we at least know our stock will move, and probably A BIG MOVE and exactly when. The proprietary term "anticipatory upswing" and "anticipatory downswing" from experience gets us into the trade as the trend begins to change in anticipation of the upcoming report. Usually, but not always, the anticipation is IN THE OPPOSITE DIRECTION of the results of the report. The better trader will utilize all the trading opportunities and not depend on just the most risky 'hold through earnings'. The worst trader would put their 'money' (or in some cases just their mouth) on a gamble expecting a report to be good or even bad and lose the entire trade.