All kidding aside, despite how promising many of the charts of the optical plays looked last weekend, I want to reinforce a concept that I have discussed numerous times: If you swing trade based on technicals, then holding full positions through earnings is a pure, weekend in Vegas, gamble. Technical analysis, at its best, can tell us what is currently known and legally knowable by the market. The less external variables you have at play, the more you can rely on technical analysis.
However, earnings presents a specific set of variables that can completely trump any chart you are looking at, as evidenced by the 36% post-earnings plunge in FNSR this evening, not to mention all of the brutal pin action plays like JDSU selling off hard in sympathy.
If you got caught with your hand in cookie jar, then cutting losses and moving on the next day is usually the best bet. You are better off, as a trader, wiping the slate clean and going back to basics. If you did not get caught in one those plays tonight, then you should do your best Bill Clinton imitation and “feel their pain,” so you can avoid making the same mistake in the future.
Thanks Chess, discipline and patience will win in the long run.
Thanks as always.
Point made also with respect to MSSR
Indeed.
I’m glad I tightened my stop on JDSU this morning.. Boy I dodged a bullet on that one..
It’s just resting. Trader Coconut Head will tell you that. Good grief. Of course, most of you are too young to remember the many times JDSU has done this since 1999.
LOL
I been trading off and on since 1998.. I remember JDSU well back then.. BTW I rode BRCM back then from 45 to 300 and sold at 50.. I wish I knew then what I know now…
Live and learn. It is all stock market tuition, paid in full.
Great job.
And btw, I looked at FNSR after hearing about this blowup and nearly fell out of my chair. $40 for that piece of crap? Who was buying that nonsense?
It had a lot of momo and the chart was actually set up very well before this disaster.
Looks like a lot of hedgies got trapped in it. Stampede for the exits.
Wasn’t it just a few days ago you were impressing us all on these same optical stocks as “setting up” nicely and now some trite metaphors …a hackneyed sermon for the goofs commenting here, hilarious.
1. The purpose of my blog is to generate ideas. For me, that usually involves quality charts that I see.
2. I have repeatedly stressed the notion of not holding swings through earnings–It is not my style. Look through the archives.
3. I charted them so that if this sell-off had not happened, they would represent quality setups.
I am seeing a new Trans-chart daily pattern; it is the symmetrical wege on 4 charts simultaneously: vix,rut, iyt, spy. I’m calling this the “SIF4” i.e., Sky Is Falling X4.
Chess pls tell Jeremy my name is now at Flys blog but my comments do not appear. Thanks.
Interesting
that happened to me briefly yesterday.
Now the question is, will there be any type of big ass titties bounce? If so, what cup size?
32A
ha!