With earnings season upon us, it is more important to use good judgment and fundamental analysis along with our technical analysis. It is real easy to chase stocks and do short term options (within 2 months of expiration), unfortunately, they rarely work out.
Yahoo and intel's strong earnings today triggered a strong after market rally in almost all of the tech and internet related stocks today. is this the catalyst we needed to get out of this pullback? or will it be short lived? how about ebay's earning's tomorrow? my prediction is that tomorrow will open big but dip later on in the day. ebay's earnings will be modest at best and trigger a thursday morning selloff before google's earnings announcement. if the pullback is still in tact before the google earnings, i predict google to way outperform and take the entire qqqq to a huge day on friday. weak monday and strong fridays is a good generalization when it comes to the market. all these predictions are based on my trading experience and the look at the technicals that seem to still be asking for a stronger correction before a strong bounce back. the situation i planned out would be ideal but the market listens to no one...so just pay attention and don't chase. good traders adapt to the market, bad traders are stubborn and try to have the market adapt to them (which of course never happens)...at this point, with the unpredictability in the market from earnings, i have turned into a day trader using tight stops and setting short targets.
happy trading!
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