There Is Something About Maria…
It flies in the face of “conventional” wisdom espoused by the financial
journalists, but the premise is simple, and often will put you on the right side
of the trade. Repeat after me, ladies and gentlemen: “If a stock does not
go down on bad news, it is probably going up.”
09:40:26
Goldman Sachs (GS)
is opening higher after beating earnings by a penny, coming in at 1.00 per
share. Consensus estimates had GS coming in at 0.99 per share. Other
broker/dealers who were expected to head lower on bearish news are not opening
as bad as indications were showing. Lehman (LEH)
gapped on the open, but is triggering a Connors News Reversal and trading
through Monday’s intraday low, and Merrill Lynch (MER)
did not gap, and is running higher off the opening bell.
Lehman
(
LEH |
Quote |
Chart |
News |
PowerRating) was reporting before the bell that its earnings for
the last quarter fell nearly 40%, triggering hysteria among the popular reporters
on the NYSE that the sky was falling for the brokers.
However, as you can see in the chart, when LEH opens, it runs
straight up, with a big green volume bar to confirm the move. A trader does not
need to be hit over the head with a 2 X 4 to be able to read what is going on
here. Within a few minutes the stock runs over 1 1/2 points before the move is
exhausted.
This type of trade will often be over in a hurry, so it is
important that you lock in profits when they come fast and furious like this.
Remember, the news is not what is important, it is how the stock reacts to the
news. When a stock is “supposed” to be down, and does not stay that way — it is
telling you something.
Until tomorrow,