Fitz Bits: Buy the Anticipation, Sell the Event

OK, let's look at some charts.

Twitter (TWTR) Groupon (GRPN) LinkedIn (LNKD) Yandex (YNDX)

Around earnings season, it's particularly important to be focused on the charts -- on the price action in response to news. Volatility always increases during earnings season. One company announces earnings and many stocks react because of the ripple effect of key information on an entire sector. So news coming into the market during earnings season is the equivalent of a stone being thrown into a very still pond (i.e., a market that has not been particularly volatile). Each earnings release by a major company is one stone. A nice little ripple moves across the pond. 

Starting this week, a lot of stones are going to be thrown in the pond -- it's more like a truckload of rocks being dumped in at one time. The result is a bit different than nice little ripples rolling across smooth water. The surf is going to be high and the water really choppy. 

You've got to stay vigilant if you are going to try to trade the volatility. Expect the expected. Pay attention to levels of support and resistance. And here are a few general thoughts on expectations when stocks react to earnings news:...533 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.