The battle line was drawn at 128.50. It's all over. The battle swung back and forth, but when the dust settled, Charging Bull had won a hard-fought victory.
Gen. Correction's bloody corpse will be scraped off the battlefield next week.
You shouldn't be. You've been had. With less than an hour to go, he called literally every price from 128.24 to 128.97, then bumped the post that was correct.
*shrug* I'll leave it to others to speculate about the reasons, I'm just interpreting what I see.
FB has drifted lower since I posted this, but it's still only down 3%. If there were any fear in this market, it would have gone under 80 within the first couple of minutes and continued sliding down the tubes all evening.
But that's not what I'm driving at. I'm talking about gauging market sentiment based on how stocks react to earnings reports. I'm not expressing any opinion on how the market should react, nor surprise at how it has reacted. I'm observing how it's reacting and drawing inference from that.
One of the early warning signs of a bearish reversal is that stocks that fail to impress, even if they don't miss and in some cases even if they beat by a little, get hammered. You may recall, for example, that in early 2008, stocks of companies that were reporting inline or even small beats were getting slaughtered as if they had missed by a mile.
What we're seeing now is the opposite. When a momo stock trading at sky-high multiples reports inline, dashing rosy expectations and confirming that it's way overvalued, and hardly moves at all, that's a sign of bullish sentiment..
Sure, things are down a little AH since the report, but I'm willing to bet that futures will be cranked up overnight and open bright green. Besides, FB isn't considered a bellwether company. GOOG tomorrow and AAPL on Monday are an order of magnitude more significant, and they won't disappoint.
A stock trading at a 76 TTM P/E and 42 forward P/E reports essentially inline (paper-thin beat on EPS, paper-thin miss on rev), and hardly gets punished at all. Down barely 1%. It was actually above the closing price for a couple of minutes.
Also, notice what a severe beating YHOO took for yesterday's miss. Down a horrifying, jaw-dropping 1.16%. It's as if the bottom fell out! ...and came to rest on a concrete slab half an inch below.
This is NOT how the market reacts to lackluster earnings at the start of a bearish reversal.
Which is an evasive answer. He stated a fact, but if I'm not mistaken, he neglected to mention whether they actually *follow* the law.
Interviewer: OJ, did you get away with murder? Did you kill your ex-wife and her boyfriend?
OJ: By law, I'm not allowed to kill anyone.
See, Bernanke says that by law the Fed is only allowed to buy treasuries and agencies, but Greenspan had admitted then when he was Fed chairman, he manipulated forex. What does that tell you?
This is the final battle between General George Armstrong Correction and Chief Charging Bull. The winner of this battle will control the territory for the foreseeable future.
See, it keeps gravitating to the 210.40s EOD like a magnet. The last 20 minutes will be critical today. If it can make a final push to break this resistance, new all-time highs within days are all but a foregone conclusion. If it fails to break after being well above it intra-day, for the fourth time in barely a week, that'll be very bearish for the short term.
I didn't say they were. In fact, that's the whole point.
In case it was unclear, when I said "This is all in reference to daily charts, not what happens intra-day", that only applied to the last paragraph. I didn't think I needed to spell that out, since the first paragraph clearly was talking about intra-day activity.
He's insane, but that's not exactly news. He keeps trying to guess exact closing prices to the penny, and states his guesses as if they're facts that he knows. And now he's posting new guesses several times a minute, changing the number by a penny or a few pennies each time.
Oh, yeah, and he's always wrong.
There's no way that's going to happen. But by the end of the week, almost definitely.
My best guess for today is between 128.60 and 129.
I'm not too sure about today's close either, but I think today's close will determine the direction for at least a week. A close above 210.50 (by more than a few pennies) would confirm that it's heading to new highs. But if it fails to break that resistance, it will probably bounce off of it hard this time. In other words, if it nosedives in the last hour to close under 210.50 yet again, then it's very likely head back down to the bottom of the range it's been in for the last couple of months, i.e. ~204-205. If that happens quickly, the chance of a correction will be extremely high, and I'll be banging my head against the wall for giving up on the correction and getting shaken out on the second to last upfake.
For now, I still think it's going to head straight from here to new highs, but that depends on a close where it is now or higher. I'm tentatively predicting another leg up in the last hour to a new HOD, and a close near the HOD.
211 wasn't the significant level, 210.4X was. The two "stalls" last week were EOD moves to close beneath that resistance. That was the level that has provided intra-day resistance over and over and over, and on days that it broke above that intra-day, that was a magnet for the closing price. I contend that if it had closed at 211, or even 210.75, on any of those occasions, we'd already be at new highs.
If it breaks 210.4X today, even if it doesn't close above 211, then I expect the next down day move of more than .25% to begin above 212.25. This is all in reference to daily charts, not what happens intra-day.
There's a stubborn resistance level in the 210.40s. If it breaks through that and closes any significant amount above 210.50, it's going to new highs. There's nothing significant about either 210.75 or 211.
For this purpose I'd consider anything more than ~.20 a "significant amount".
What does any of that have to do with max pain? Do you even know what max pain means, or are you just using a term you've seen that you don't understand and guessing what you think it sounds like it means?
A drop after an earnings "beat" that doesn't quite live up to lofty expectations happens if the stock's valuation is already high, not if it's undervalued.
In 2008, AAPL dropped sharply after an earnings beat of "consensus" estimates that wasn't as high a beat as what was really expected. What's the difference between then and now? One big difference, of course, was that we were in the midst of a major financial crisis and the economy was in recession. But the key difference is that AAPL was trading at a P/E in the 30s at that time. Now, it's at 17, and the forward P/E, just based on consensus estimates with no beat at all, is a paltry 14.5.
If AAPL reported in-line, that would result a significant haircut, just because it's AAPL, and AAPL always beats. But that's not going to happen, because it's AAPL, and AAPL always beats.
With 2.25+ EPS, AAPL should do nicely. Anything above 2.30, and it'll go through the roof.