Monday, April 13, 2009

Goldman Sachs Earnings Reaction


GS has about a 75% chance of surprising many bears and trading higher from where it traded in after hours($128) by tomorrow afternoon or wednesday. The after hours reaction does not favor the bears case right now.

14 comments:

Anonymous said...

Why not surprising bulls like you ?

Cliffynator said...

As of 8 PM EST, GS is down to 128.21, but that'll mean nothing for pre-market tomorrow. Also, GS is testing a down-slope resistance set back in Oct. '07.
I've found several traders who were stunned that they announced today, so early. It's all smoke and mirrors, and we know it. And this is why even us newbie traders still have trouble accepting the rally. I've been in cash for some time, btw, until I learn to trust the charts over my own "intelligence".

Stewie said...

hi anon: believe me i not a bull but i have been only recently and i am fully aware that this whole rally is built on hot air and steam but it is still a rally and needs to be respected. This thing has so much doubt behind it, that it could run much further than many can imagine. I miss the days when FAz and SKF were ripping higher and i see it happening again but when is the only question??

Stewie said...

cliffy: i learned the hard way that if you try and use rational thinking in the irrational world of trading markets then you will be sitting on the sidelines....a lot. best to just trade the slope of the charts and use tight stops for emergency exits and ask questions later. As far as GS goes, the reason why i am short term bullish (very short term bullish) on this stock is because the after hours reaction is only a minor sell on the news reaction, once short sellers get a whiff of this, they'll quickly realize that they entered shorts too early and wanna cover. take a look at the intra day moves in GS today and thursday, this is classic short covering. I am guessing there are more hiding in this issue.

camtrader said...

If everyone is expecting GS to be like WFC isn't all of the anticipation pretty much already priced in? Even if they double earnings I think it would hardly be a shocker like WFC.

Hence I don't a repeat of what happened with WFC. Unless people are really dumb and still fall for the same financial shenanigans. Wait a minute -- people are dumb. Sigh.

Stewie said...

camtrader: people are dumb but let's dig in a little deeper and speculate why this rally is happening? first of all, ALMOST every single piece of bad news(minus literal financial armageddon or black swan event-highly unlikely right now). look at the charts and you'll see that what we saw was a market crash that took us down over 50% from the highs in about 1 year. This crash did almost the same damage to the SP500 and Dow jones index that the tech bubble crash did in 2 years' work. severely oversold is the understatement of the year, any hint of good news. MASSIVE short positions piling in late comers and vast doom and gloomers, is the prefect recipe if i was a hot shot trader sitting at a goldman sachs trading desk or big hedge fund desk and wanna reap easy fast phat profits and i had billions at my disposal, then you better believe i will create the mother of all short squeezes. the fact that people are still trying to spot tops(me included) is inherently a bullish sign, and i use the term 'bullish' very lightly.

Greenlander said...

what's yr reasoning behind the 75%?
I was thinking the opposite.

Stewie said...

GS ran up more than fifteen points in two sessions. after earnings most people would have assumed it's good idea to short because regardless we should see severe selling on the news. but based on after hours trading, the stock gave back less than 2 pts. that's nothing much at all given that the stock ran up over 30 pts in 2 weeks. i think it'll open weak, suck in some shorts and then ramp higher. i have just seen this scenario happen too many times in the past. we'll see if this time is any different.

Anonymous said...

Love your blog. You definitely got skills, but tomorrow it's more like 75% chance down. I've been shorting anytime we get above 850. This rally is finally showing some weakness at least short term. This week will end lower. We won't get 6 up weeks in a row. Keep up the good work!

Stewie said...

thnx anon. appreciate that. I am bullish only for a very short term on GS. we might see a one short squeeze phenomena and rattle some cages. Personally I'd love to see the market fall back to the 800 level. i imagine it'll be bot up real quick tho. just stay on your toes, focused and truly expect anything.

Greenlander said...

v interesting take stewie.

mr. squeeze said...

stew et al,

remember part 2 of the squeeze of the 4 Fatties of the Apocalypse we talked about a couple weeks back?

it's begun.

look at C/AIG/FNM/FRE

you got to hand it to the Guvvies.
they timed it perfectly.
kept their powder dry and close to the vest,
until just the time the market need a little more boostin.

even faked me out a tad.

ptg said...

I agree that we'll get a short squeeze later this week, but I think overall the week will end lower. I've been shorting tops recently and it's working decent, but only for real short time frames. Difficult market to make large $$$ now. Anyways, Thursday or Friday morning might be a good time to cover shorts and go long for a short term trade into next week...depends on the tape of course. I'm anon who said you have skills.

Stewie said...

GS short squeeze i expected look very bleak right now. i think that share offering is enough reason to sell it down today.

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