Marketgems Earnings Trader- Trading Strong or Weak Earnings Growth

[jenna]

RUMINATIONS after being stuck in front of a computer screen all day.


I don't like sitting in front of the computer all day. I was forced to because I got into a large position in QCOM mostly to make up for the late entry after hours. I know there are other others that feel differently but having all the time I need to trade and all the equipment, instant execution, strategies that are tried and true, I still make more money on the longer term trades ignoring some bear flag rallies and the $0.10 to $0.25 or less the daytrader manages to scalp from one trade while losing the same from another. If I trade 4 times a day that is a lot.

I do like holding stocks like QLGC for maximum downside and tend to give up SOME but not all the small gains you can get from rallies in order to short the upside. EBAY is the one I would prefer to trade for 2 trends simply because EBAY is a better peformer making for many days of upside and many days of downside, while QLGC after all the pluses and minuses are tallied, the downside is DOMINANT.

With earnings plays, whose earnings are already out and have proven themselves, I tend to hold long positions longer, but I would not be holding a loser like QLGC or KLAC days waiting for the BOTTOM that could be a week a month a year away just as easily as 3 days. If you want pennies, collect cans. Scalping for pennies is no way to trade the markets for a profession.

SECTOR watching is a better way and while we were short on the building sector, we saw that clear reversal today which made profits on both the long and short side. THE LONG TERM DAYTRADE or the SWING short is still the way to fly. Stick with FAMILIAR STOCKS, leaders in their sectors. Keep away from scanned stocks that have untested trading patterns. I figure one day we'll miss a nice move up while still holding puts but that happened late July and we got on the bandwagon fast enough.

Rallies are not one day affairs.. IT TAKES LONGER TO HAVE a rally that is SUSTAINABLE. Financial performance is SLOPPY, SHODDY and many companies still have "EDS_like" surprises down the road. I do plan for the unexpected which is why I don't hold "boatloads" and am very skeptical of those that claim after the fact to have been in position. Some cases in point are a half dozen traders I approached before ADBE's earnings asking their opinion, most were afraid to deal with a definitive answer and were extremely evasive. After the report, they were suddenly LONG ADBE, so beware of what you read. There are a handful of traders who do give you the potential trade RIGHT BEFORE THE MOVE, and they can be trusted better than the newsletter or trader that gives you a forecast one to 7 days in advance of the market move. In fact although I have barely any time to read threads, I compared 2 threads lately with more expensive trading services and the difference was APPALLING. The thread won hands down!!! I would suggest the trading service read the thread before posting their 'delicacies'.

As investors are suffering the greatest pain, us traders can be on top of the best opportunities but they are not in the 15 or 20 minute trade. If you have a lot of cash on the sidelines you can take advantage of the opportunities as they present themselves. I guess you can call today's rally in QCOM an opportunity and I had lots of cash on the sidelines because I'm only 20% invested in this market and very satisfied that I am that much in cash and 25% of those 'investments' are on the short side. This was the second long in QCOM in 10 days and I have a kind of change of heart where that stock is concerned as you can see if you trace back the QCOM plays on this thread. I didn't hold any position long though.

I don't feel that your financial trading future depends only on reading charts but a combination of economic, geopolitical and sentiment strategies (supply and demand). It might just a strategy that adds confidence in a trade, but when I see scores of traders covering after $0.05 or $0.30 gains missing the beef I have to wonder about the profitability of their trading strategy.


You might hate economists,, and abhor actual financial figures. You might scoff at missing earnings expectations but if the market takes a much bigger turn to the downside, you can be assured it won't be because of the charts but rather because of more complex economic realities, lack of trust, impending fears of war (a very valid fear as I've lived in a 'terror' situation for 14 years and know the mentality and lack of ANY vestige of humanity from the terrorists led by Yassar or anyone else) that are pulling the strings of the charts.

I am ready for any opportunity on the long side and I do miss trades because I need more confidence (BMET, CTAS and NYCB) are some I just stood by not ready to commit that much to those trades. Had I depended on the fundamentals of these proven earnings plays, I probably would have taken the plunge as I did with LEN and even ACS. I didn't leave the house holding QCOM long. I ALWAYS LEAVE the house holding my shorts and puts. I guess I still don't trust the upside but after 6 years of doing earnings plays almost exclusively I have learned a thing or two.
If anything, earnings and lack of earnings are the #1 catalyst for a strong price move. It certain isn't yesterday's reversal bar!!!!