Dear investor or trader,
Whether it is a sell-side analyst, a macro economist, a technical analyst, a newsletter writer, a professional trader, or hedge-fund manger, no one hears from more market professionals than we do to help you get in before the news hits the Street. For example, on Monday, January 7, 2008, we informed subscribers that the data in the December unemployment report confirmed that we were in a recession and suggested shorting the overall market. Two days later Goldman Sachs issued a report saying nearly the exact same thing.
Then, on Monday, March 10, 2008, we told subscribers that the February unemployment report would convince the non-believers that the U.S. was in a recession and it was time to start looking to go long in the market… and in early July we told subscribers it was time to short energy and wait for another opportunity to go long the overall market.
But where we see our biggest gains – navigating through earnings surprises and disappointments to provide short-term trades that are consistent with the direction of the market.
For example, on Monday, July 7, 2008, we pointed out that expectations among analysts were for Alcoa (AA) to miss estimates but it was too oversold to go much lower. Meanwhile, volatility had spiked due to fears of the miss. Therefore, we suggested to traders to buy the out-of-the-money August $35 call and sell the July $35 call.
One week later, this trade was up 185%.
For a more traditional trade, on Friday, July 11, 2008, we suggested buying shares of IBM (IBM) as it bounced off a trend line ahead of earnings and becauses analysts said their checks indicated every single business segment was tracking above expectations and and the company would beat earnings estimates. The stock opened at $121.80 on July 11 and closed at $126.52 just before the company’s earnings release for a gain of 3.89%. The stock then gained an additional 2.66% following its earnings release.
However, most of our trades are after-the-news where the volatility and momentum have shown to drive stocks higher in any market and have been proven by an academic research study to “significantly” outperform the S&P 500. For a recent example, last week BlackRock (BLK) reported earnings above the consensus estimate of $2.01 per share and above the analysts’ true expectation of $2.04 per share. On the chart, we pointed out that the first level of support/resistance was the $188 mark. The stock opened above this line, moved below it and quickly went higher again to close two days later at $218 for a 16% two-day gain.
But that’s not all… you’ll also get:
- Hundreds of comments from analysts each quarter about upcoming earnings surprises and guidance announcements
- A weekly research report with a dozen charts and trades around upcoming earnings releases with a top-down analysis for market timing
- A more conservative, long-term portfolio that has outperformed 95% of all financial publications followed by Hulbert Interactive.
- A daily analysis of current option prices for a projected stock price reaction following an upcoming earnings release.
- A daily review of option activity to identify significant positioning of large traders before an earnings release and an analysis of their trades before they’re concluded.
- A systematic trading system proven to significantly oupterform the overall market by an independent academic study
- The most complete resource for earnings releases and guidance announcements that Barron’s calls their favorite.
- Earnings estimates that a Bloomberg News study proved to be the most accurate available.
P.O. Box 677
Jackson, MO 63755