AMAT Update

I featured AMAT as a funny business earnings post, after earnings, but thought it may make for a decent trade. A couple of members have picked it up, maybe more, so I will update it and mention that AIG had a very similar earnings scenario and may become a short trade candidate.

 AMAT was trending down before it made what I would call a definitive head fake.

 Here's a closer look, and I believe the earnings reaction was leaked and prepped by Wall Street as part of the head fake-DO NOT UNDERESTIMATE THE POWER OF A HEAD FAKE MOVE-I just closed GLD on a head fake for a 215% profit. The volume spike and the gap up that lost about 7% and closed in the red was after AMAT beat the night before, but had bad guidance the next day. Guidance is really just about all Wall Street cares about while the amateurs look for the EPS/Revenue beat or miss, Wall Street doesn't care what they did, or  only to the extent of comparing vs "what they will do moving forward" A head fake move can drop or rise (depending on the direction) very fast. In this scenario, a bunch of longs were trapped in AH buying on the earnings beat, the next day they were trapped with a lower close to the tune of a 7-10% 1 day loss. They hold out hope, but once the trendline is broken and their losses are bigger, they sell and add supply driving prices down even faster.

 This confirms the trendline as you can see volume on the break and an unsuccessful test of the trendline.

 The 5 min 3C chart shows distribution in to the gap up the morning after earnings.

 As does the 15 min chart, this is why I say that I believe Wall Street knew what guidance would be and set the trade up ahead of time, shorting at the high.

 The 30 min chart confirms the same, we see confirmation of the trend and then something changes.

 The longer term 60 min chart shows the same and then some.

AIG had a similar event ad although it has bounced from the earnings gap and loss of the gap, I think that day may have broken the back of the stock, similar to what I feel about AAPL on the 15h.

We'll keep n eye out for a trade in AIG as well as AAPL