To say the past three weeks have been wild would be a major understatement.
For example, the S&P lost 11% of its value in just 4 trading days ending in the most recent low of 1867 on August 24. Then it gained over 8% from that August 24 low to Thursday's high of 2020 after the knee jerk reaction to the Fed's decision to stay pat on rates. Then the S&P fell almost 3% from its peak on Thursday to its low on Friday, after traders had some time to contemplate the Fed's decision. That qualifies as a wild ride!
All of this volatility got me wondering how stocks that reported strong earnings for last quarter held up while the market was under fire. And what I found is they held up quite well.
For instance, at EarningsBeats.com we focus strictly on companies that beat earnings expectations plus have solid technical charts. Those that make our "first cut" are added to our "Candidate Tracker" which become trading candidates for our members. We added 14 stocks on September 7 and what I found was all of them have held up very well. For example, while all of the major indexes have mostly remained below all key technical levels - 20, 50 and 200 days - many of the stocks we recently added to the Candidate Tracker remain above important key technical levels.
Perhaps this isn't so surprising. One would think that companies that beat earnings expectations would stand out, especially during market turmoil. But it's always good to validate and while it's a fairly small sampling it points out why it makes sense to zero in on companies that beat expectations.
If you would like to see a sample of what I'm talking about just click here and I will provide you with some examples. It's worth checking out as all traders need whatever edge they can get when we're in the type of market environment we're in now.
At your service,
John Hopkins
President
Invested Central/EarningsBeats.com
