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Whatever Happened to the Earnings Catalyst?

These six stocks barely budged in response to their latest earnings reports

by 8/5/2014 10:51:00 AM
Stocks quoted in this article:

The following is a reprint of the market commentary from the August 2014 edition of The Option Advisor, published on July 25. For more information or to subscribe to The Option Advisor, click here.

Remember a time when earnings reporting day was truly a day of reckoning for a stock, especially on the tech front? A time during which the market's enthusiastically positive response or its palpable disgust with that all-important "number" could catapult stocks to price levels never before seen, or wipe out five years' worth of price appreciation?

I think I still might remember, but my vision has become clouded after quarter upon quarter of the kind of post-earnings action as illustrated on the accompanying charts.

Visa (V): Down by about 5% at its lows today -- but has been grinding higher ever since, and if you wipe out the action of the previous 10 days this could be just another dull trading day from early July. No trajectories changed here.

20-Day Chart of Visa (V) with 2-Hour Bars

E*Trade Financial (ETFC): Can you guess the date this (allegedly) highly volatile brokerage name reported on this 3-month chart? Hint: It was after yesterday's close. But don't say it too loud, or you might wake the stock up.

3-Month Daily Chart of E*Trade Financial (ETFC)

General Motors (GM): At point A, the headlines were that GM was a dead man walking after Congress finishes with them; at point B, the GM perma-bulls were crowing about how well sales have held up despite all the bad publicity; at point C (two days after earnings), the bears are back. The only problem (assuming you are a trader who likes to profit from strong directional movement) is point C is disturbingly close, price level-wise, to point A. Only airline passengers like to buy round trips.

3-Month Daily Chart of General Motors (GM)

Google (GOOGL): So Google finally took out with authority that pesky $600 level on its post-earnings surge? Well, for at least a week or so. And if you don't count intraday. And if you don't count today (so far).

20-Day Chart of Google (GOOGL) with 2-Hour Bars

Apple (AAPL): What's not to like? They sold the "(insert your word here)" out of their gadgets and gizmos, and once again "proved" they were not even approaching irrelevant (just check out their TV commercials), and the Street liked it, and the people liked it, and the first bar was big and (what could be more perfect?) it was green, and there was dead aim on that September 2012 high just north of $100. And then many little tiny baby steps.

3-Month Daily Chart of Apple (AAPL) (AMZN): Okay, that Bezos guy is finally gonna taste it, right here and now! Down north of 10% in the pre-market? That's nothing -- here comes the 2-handle! But wait -- what's with that niggling little smarty-pants of a rally since the opening? And isn't the stock trading at just about the same level as a couple of weeks ago? So, nothing has changed. Except perhaps for some gratuitous Fire phone buzz?

20-Day Chart of (AMZN) with 2-Hour Bars


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