Marketgems Earnings Trader- Trading Strong or Weak Earnings Growth

[jenna]

Great market climate if you were prepared for pullbacks!! Let those puts/shorts run! Traders should look beyond the 1 to 2 day chart and look at the REASON the stock broke down in the first place. SNDK still joins KLAC, SOHU, CCMP, CI, JCOM, even INTC as very shortable at rallies. These patterns are called "bear flags" in downtrends, which is why we choose other strong companies for our long plays. The area of breakdown is usually a key overhead resistance area that FAILS which is called a PATTERN FAILURE". DELL report tonight and much less NVDA and ADI, could add to a the jitters which are well founded (after today's big moves down in CSC and SONS the market is not a one way uptrend) HPQ's sharp break yesterday is a clear indication that the DELL report will have a lot more bearing on immediate future market climate than any words from Mr. Greenspan.

Those stocks that have BROKEN DOWN CONSIDERABLY after their respective reports made the cut into the list of short the rally plays. Traders have to differentiate between a healthy correction and total breakdown after the report!