I just wonder if some of the longs don't let their positions, their need to be right, get in the way of objective thinking. What I mean is, here we are at $12, a real price which has huge volume associated with it. If, I was in the gut-wrenching position of being long here, I think I'd seriously consider standing aside and wait for a sign of strength and then buy the pull back. With so much volume at $12 it is sure to retest this level. Why hang on and hope for a positive reaction to the earnings? The risk is tremendous that it could go against them in a BIG way.
Obviously the behemoths, the whales, have to stay in because they can affect the price by moving in and out. But us little guys, dang, a hundred of us combined can't move it one way or the other by our trading. So, to sit on your hands when you could be actively trading, makes no sense.
But, there is the psychology that keeps people in positions despite the risk. There was a test done where they knocked on hotel doors in the middle of the night telling people their cars were going to be ticketed for a $100 parking violation. Most got up, got dressed and went and moved their cars. They also, told other people that the knocker's cars were about to be ticketed and that they would pay them $100 if they would go out and move their cars for them. Hardly anyone would get out of bed to make an easy $100.
The lesson is that people are not rational; they fear losing but won't take action to gain. So, it is with holding on to risky position, folks fear having to realize a loss, despite the risk and despite the possibility of re-entering the positioning under less risky conditions.
I agree with you Onepoint and Michael. No question waiting for earnings is just a matter of one's risk tolerance. I have been a winner and loser playing earnings in various stocks, so for me it is a wash and I just assume stay on the sidelines until I get my bearings again post earnings. In terms of insider trading it is hard to call. Selling of course is always a cause for concern, but as you noted Michael, stock options and stock compensation does result in general selling from time to time based on individual needs and wants. It is really hard to gauge, and that is why I never would base a decision purely on selling. I would possibly make a decision on buying, but even then it might be options, and you never know what price they are actually buying the stock for. Anyway, time will tell. No question the stock seems to want to sit around twelve or is at least being manipulated to do so. The covering that has gone on coinciding with the market sell off was particularly genius. They are being extremely strategic, which is scary.
MM's SchM-M's. It got walked up on light volume, light demand, til it got to the supply line, the high-volume low of Sept 14th at $12.27. Then what little demand there was just dried up. It wasn't supply that dried up, it was lack of demand. The price went down until it found demand. The funds and specs just aren't ready to run with it. Be happy it didn't break down.
If they are able to do this for the last couple of days, don't you think they will take it below $12 if they don't deliver on earnings? Yesterday I watched RES go up more than 3% after beating revenue but missing on earnings, after watching it slide to minus 2%. The markets have priced in earnings already.
At the moment it's in the logic: the shorts control more shares than us little guys in the long.
IMO it will be important to hear what mgmt has to say on future prospects apart from earnings.