Hubert Senters here.
Got a question from a viewer, Ron.
Hi Hubert,
I hope I can ask a question from replying to this email. You can. My team monitors it. And they filter through it and they get me the questions. So yeah, you can do it.
Why do you think we are seeing so many companies report earnings that beat the street but then selloff. I just don’t get that. Have a great day, Ron.
So Ron, good question. One of the most frustrating things that you will find in trading is a lot of it makes zero sense logically.
You’ll be like oh, great earnings and it sells off. Oh, terrible earnings and it goes up. There’s no real or rhyme reason to it. It really is.
If you think about it, it is a price discovery of millions and millions of people trading the markets every day. And it’s really the reaction to all of the pent up fear, frustrating and greed that are in those positions.
You could have something that is heck. Let’s take Uber for example. It’s not a profitable company at all but it trends well.
You can take Tesla. It took forever for them to get profitable and Amazon. So it’s the storyline around it and how convicted people are to holding that position until that storyline is played out.
It’s the same thing with Bitcoin. Bitcoin continues to rise because people think that Bitcoin could potentially be worth more than other stuff overtime.
And then you have people that suffer from FOMO. They’ll get in there and then they’ll push it a little bit higher becuase they’re getting in FOMO with the high and then it’ll push a little bit higher so.
I try not to get to tight up about the fundamental analysis of the markets. Not that it’s a good thing or bad thing. It’s just a thing.
So I trade more technically. So I don’t really care if it has good earnings or not or if they’re making a profit or not. I’m just reading the chart.
And I’m trying to trade the trends as long as I possibly can. I don’t know if that helps you out or not but that’s the answer I’m going to give you.
One other answer I would give you is also we’re starting to get a little long in the tooth. The uptrend is running a little bit out of gas.
So as you can see here in the S&P 500. This is S&P 500 futures here. That the ADX dropped below $20 since around January. The markets ran into a little bit of a low and then they pulled back and they’re trying to go higher.
And then they’re also running out of a little gas there. And you can look at the same thing. It’s like the Nasdaq. The Nasdaq is in non-trend mode. The Dow is in non-trend mode.
And there’s been a slight rotation from the big text into the mid or micro caps in the Russell $2,000. This one is a better trend.
So those are two reasons that I would focus on and tell you like it doesn’t really matter what type of earnings they are.
It matters if the buyers are more aggressive than the sellers or if the sellers are more aggressive than the buyer. That’s really what matters more than anything versus how they did earnings.
I think in my opinion if you’re going to be a long term holder of something what’s that matter what you did in three months, what are you doing in 12 months, 3 years, 5 years, 7 years and 10 years is the company is more important with what you just did in the past 3 months. So it’s a little bit short term oriented. Hope that helps you.
Now, if you are like myself and conservative in nature but you really like looking at charts and doing technical analysis and stuff I’m going to show you my secret weapon for finding better trades tonight on a free live webinar.
That will be tonight Wednesday, February 10th at 7PM EST. Heads up, there are a lot of people register for this webinar. If you want to increase your chances of getting in before people get locked out because I guarantee it will happen tonight just because there are so many people registered.
Then you might want to show up 15 minutes early. I will make sure that I open up the GotoWebinar software at least 15 minutes early so if you’re really keen on coming and watching live presentation jump in there that will increase your probability of maybe getting a seat.
Sounds a lot like trading. It’s going to maybe probably increase your potential of maybe making some profits.
Good luck. Hope it helps. I’ll HYPERLINK you to the registration form.
Hubert.
