Earnings and expectations

We came in to this earning season with high expectations. Market had rallied for almost 6 month coming in to earnings with most stock at top of range with earnings priced in. As the earnings season is progressing the earnings trend so far are not as impressive as in the last couple of earnings season. But things will become clearer by next week. While there has been a slowdown, it is not as dramatic as some perma bears are claiming it to be. Remember same perma bears had same thing to say about earnings coming in to July earnings season.

Not as Positive as in the Past

With 14% of the S&P 500 reported, the fourth quarter earnings season is ramping up fast. This week over 400 companies in the Zacks database (125 are in the S&P 500 index) are scheduled to report making it the busiest earnings week of the season so far. While positive surprises are handily exceeding disappointments, the ratio pales in comparison to what we saw in the first three quarters of the year. But with the bulk of reports still ahead, it’s still anybody’s game. At this point median fourth quarter growth stands at 12.4% and the surprise ratio is hovering around 2.2:1. At a similar point in the previous three quarters, the surprise ratios stood at 6.2x, 8.0x, and 7.3x, in the first through third quarters, respectively. The median expected growth rate for all the firms in the S&P 500, reported and unreported, is 9.8%.

The Financials sector, with nearly 35% of firms reported, has the most useful data out thus far. Here, median fourth quarter earnings growth sits at a healthy 15.3% and positive surprises outnumber negatives by over 2 to 1. However, while over one third might seem like a decent sample, the early reporters are concentrated in different industries (brokers) than those yet to report. The median surprise for the sector has been an impressive 2.4%. To get some forward guidance on possible disappointing sectors, we turn to Tech and the Industrials. Both of these sectors have relatively low positive to negative surprise ratios and this could potentially lead to choppy results. Again, these are just preliminary predictions. By the end of next week, we will have quite a bit more data to work with.

Coming later:
Earnings Expectation Cycle and the Cinderella Strategy

Best site to learn to trade

If you are serious about your trading and want to build an enduring edge, the Stockbee Member site might help you.

Members tell me they have tried a lot of things before coming to my site, and it has offered them the most extensive and detailed methods to swing and position trade. Members range from very experienced traders to novices.

No advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant tweets self-promoting the site, and no tall claims. Every member comes through word-of-mouth recommendations from existing members.

As a member, you will learn the basics of swing trading, momentum investing, growth investing, and risk management. You will learn about Stockbee Momentum Burst breakouts, Stockbee Trend Intensity Breakouts, Stockbee Episodic Pivots Breakouts, Stockbee Lemonade Strategy for 401k, and many other member-shared methods.

You will learn how to set up your own scans, how to select the right kind of stocks, how to set up stops, when to enter, when to exit, how much to risk, how to track your trades, and all other details about trading.

You will learn about developing your own methods and not relying on others for trade ideas. Develop your own edge. Once you develop your own method, you will have a lifelong profitable method.

The site gives you an opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different backgrounds and experiences willing to help each other. Members have shared their methods, scans, software, backtests, and market insights.

Every day, the emphasis is on continuous learning and upgrading of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors, and new traders.

You will see that many trading bloggers have been using my market timing methods, scans, and chart templates. They have developed their own methods based on my methods.

Almost every member comes through a recommendation of some of the leading trading bloggers and trading sites. 80% or more members continue to be members for more than 3 years. Most tell me that they stay on because every day they learn so much from the members' site.

If you are looking to develop your own trading strategy, the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on the members' site. Every method, every scan, every nuance is detailed, and all possible help is offered to design your own method.

404

Recent Articles