eBay and the Bears

It's all about banks this week. At least that's how it feels. I'm not going to toss my hat in the ring on any more of those trades, though. Wells Fargo (WFC) was painful enough, and I have to say the reactions in those stocks are driven by much more than top- and bottom-line beats or misses. If a tech stock posted a beat like Goldman Sachs (GS), we'd probably be looking at a 24% gain rather than a 4% gain. I realize this may be a bit of an exaggeration sprinkled with sarcasm, but I am going to pass on the long list of banks directly in front of us.

eBay (EBAY) heads into earnings with a similar technical feel as it did last time around, when the chart appeared bearish and the initial blink-of-the-eye reaction in the stock was bearish. Then EBAY turned and marched higher, blowing bears out of the water. I wonder, though, how many times EBAY can dance with a bearish technical entry into earnings. If I wanted to go with a lottery ticket on EBAY, it would be long January $50-$48-$47 skip strike put butterflies at $0.26. I could just buy the January $50-$48 put spread, but I can buy 1.3x as many of the put combinations, which would put me in a better position on any move below $50 while staying over $47.75....166 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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