Well, what I was getting at, is when the market is NOT trending you need to have a bias to choose a strategy. We seem to agree.
You misquoted/misinterpreted me. I did not say price "dictates" fundamentals. I said price action "tells" about upcoming changes in fundamentals; a distinctly different concept.
Also, I am NOT just short term. Using technicals, or reading the tape, has nothing to do with time frame selection. I'm going to end this here, because you're not ready for me yet But think about this:
If you had a $50 million account principally devoted to SKUL then how would trade it? You would have enough capital to manipulate price and so I don't think you would care about quarter to quarter or even year to year changes in fundamentals because since it would take you so long to get into and out of positions you would have to use your enormous capital to move the stock in accordance with YOUR plan and you would have the capital to do just that, damn the torpedoes. The reactions to fundamentals by the crowd would just be blips of noise in your world that you could easily manage.
Now consider the home-gamer with a $50k SKUL-account. Does it make sense for him to base his trading decisions on fundamentals? Or should he follow the guy with the $50M account who 1) can't let fundamentals affect his plan and 2) has the capital to move the stock in the direction he wants? And if the answer is follow the money, then how would you do that?
Price and volume.....reading the tape. Good luck but keep an open mind.
I do understand where you are coming from and you may be successful doing it. That is great. For me, I will look to see where the stock will be in the long term. I don't want to have to be on watch daily with a stock and most retail investors do not have the time to do that either. I am open to your way of thinking, but I am not a full time trader so I don't have the time to look at technicals. Nor do I want to change course of what I am doing because it is very successful for me.
Answer me this, if this company continues to grow at a very good clip, say 20% a year, will the stock price eventually move up? Fundamentals say yes, it will attract a whole bunch of investors. That $50M guy will have to react and change his plan. If those bunches of investors are longer-term oriented investors then the game finally changes. That is what I am more concerned about. Everything else is white noise. A sudden stock price drop because the company met earnings expectations is not a game changer in my opinion. Panic selling because of it is just handing your money to the $50M guy. I understand your position that you should sell on a SOW because that $50M guy has information we don't, but only if the company's growth will suffer with whatever news is out there. But will that news really be a game changer, or just another white noise news story that panics people? The stock price will have to eventually come back up if SKUL keeps growing at 20%+. That is what I am more concerned with. If I am wrong on the growth story, I will lose money. But I will have lost a lot less using my options strategy than if I had bought the stock at 12.50 when I sold my first put. I have already gained 6.8% in premiums in just 2 months time. If the stock ever goes back to 11, which it will if it continues to grow, I will easily eclipse my double digit annual return I am looking for. No need to panic, just need to be patient and wait for appreciation while watching for a potential game-changer.
"Answer me this, if this company continues to grow at a very good clip, say 20% a year, will the stock price eventually move up? Fundamentals say yes, it will attract a whole bunch of investors."
Sure, even at 5% a year, it doesn't matter. When the big players are fully positioned and are ready to let the funds and specs mark it up then any and all news will be good news.
You are stating the CNBC paradigm which says the "whole bunch of investors" matter. They don't. They are fodder. They are the source of new money for the big players, the fodder that keeps CNBC on the air, and keeps the bonuses paid and light on in Wall Street.
"That $50M guy will have to react and change his plan. If those bunches of investors are longer-term oriented investors then the game finally changes."
No, no, no. You're talking about a herd of cows leading the cowboys. It never works that way.