The indexes remain near their all-time highs despite today’s sell-off, but underneath the market the action in individual stocks is mixed, murky and erratic. Fortunately, we can focus on earnings season as we seek to capitalize on high-velocity, high time-value set-ups in stocks that have just reported, long or short. That has remained my primary strategy because there are few meaningful trends out there, and most of the action tends to be of the swing-trading variety.
In many ways, the action of individual stocks after reporting earnings is a clear reflection of the haphazard, choppy and sloppy action that bubbles and boils beneath the surface of this oddest-of-all market environments. Reviewing those names that have already reported so far this week bears out this essential here-and-now market truth.