Marketgems Earnings Trader- Trading Strong or Weak Earnings Growth

[jenna]

KLIC, PMCS, TGT might be up at the open but they are shorts the rally like many of the techs this morning. You judge a company, sector by how well they HOLD UP after the 10:00 reversal period. Our traders are always being told to expect a gap up sell especially in technology which is almost always "sell the rally" and look to buy (if there is a buy trigger) at the bullish harami preceded by 3 or 4 wide range bars until climactic sell occurs, confirmed by an eventual move above the 20 ma. You certainly couldn't have held many techs in advance of the AMAT call, so we just held some options. Gambling on one stock and putting a lot of money into a gamble is not the way we trade. But then when the coast is clear, they come out. HPQ is still doing well in "anticipatory upswing" but we sure as heck are going to protect our capital and lock in profits and hold a safe amount of "straddle" options through the report, anything else you might as well go out to the racetracks.

If these techs don't hold up, then there are no buyers, just traders looking to take an easy profit and sell short to begin the cycle again. Still a flight to quality and value on an up day except for OVTI, our gains on from the short side. (especially short and run down are the restaurant sector which we stressed yesterday and the semis which are easy 2-trend days)