Blindsided by Earnings
Overall, earnings are not weighing on the market. Spain barely weighs on the market, so why should any single earnings report? Still, earnings hover over the bulls. There are plenty of companies reporting good numbers and holding up well, but I'm seeing few companies report disappointments and move higher. With the strong first quarter, it's more likely you'll see a sell-the-good-report reaction than a buy-the-poor-report reaction. In 2009 and 2010, companies could issue a "kitchen sink" report where numbers were bad and guidance was worse, but that was seen as getting all the bad news into the market. Now, we have reports where companies are blindsided by their own numbers or bulls are blindsided by the market's reaction. The key is NOT to be disappointed and be ready for ANY question on a conference call.Herbalife (HLF) Source: StockCharts.com View Chart » View in New Window »
Herbalife (HLF) and Green Mountain Coffee Roasters (GMCR) are two price examples. HLF is now clinging to Herbalife-Support, but a quick glance at the weekly chart doesn't show me support until the $42.50-$45 area. The daily chart is broken and of little use at this point. HLF was thrown off by just a few simple questions on their conference call from David Einhorn. Many analysts have rushed to HLF's defense, and while they may be right, does anyone want to take that side of the trade. Both Einhorn and analysts are talking their own book, but remember your focus should be on your own book. I'm only playing the volatility in names like this....210 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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