Just a brief observation:
following earnings announcements last week, it was like pouring corn seeds and oil into a big plan and cranking up the heat. Many many companies, who announced earnings the past 2 weeks, saw their stocks pop 10% or more in one day.
I’m not sure why some of these companies (truly some announcements were mediocre) jumped:
- could’ve been over-depressed stock prices reacting to news that showed the company wasn’t doing that bad after all (but not super either)
- could’ve been that news was pretty good
- could’ve been computer traders snapping up any dormant stock at the slightest stir and helping to drive up the price
- could’ve been stock jockeys at home jumping on any news that isn’t dire trying to find “bargains” (“cheap” stocks) in a stock market that keeps going up
Who knows, but the whole scene was interesting to watch. It seems in this market that a strategy of tracking earnings announcements, buying poppers on the first 30 minutes and trying to “catch the middle” of that 10% move and quickly selling might seem to work. I’m not sure for how long this little strategy would work but perhaps as long as the markets stay on light volume with no major bad news to stir up across the board selling.
FYI: this is no recommendation to go out and do this, just an observation.