The Earnings Algorithm That Could Make You a Killing This Season
If you blinked, you would have missed it. Suddenly, the market is behaving like the market we remembered from a few years ago.
Rather than being subjected to knee-jerk reactions in stock prices based on China’s economy, the Federal Reserve or the latest crisis in Europe, investors finally have a free hand to make (or lose) money from one thing and one thing only…
We’re right in the middle of earnings season, and Profitable Trading’s Jared Levy has been telling his Profit Amplifier readers to ignore the “noise” in the market and instead focus on individual stocks. That’s because it is the best shot investors have to make a killing during this earnings season.
As Jared says:
If a company gives a bad earnings report, its share price can immediately get crushed.
At the same time, if a company gives a better-than-expected report, it can send its share price soaring. That’s the way earnings season works. There are big movements both ways.
Now, a lot of investors view this as a bad thing. The volatility scares them, so they simply close their eyes during earnings season and hope for the best. That’s a huge missed opportunity.
See, the market is full of uncertainty. No one can say with 100% certainty where the market will be one year, five years, or 10 years down the road. There are simply too many factors.
But we can know with 100% certainty that many stocks are going to go crazy over the next month.
It always happens during earnings season, no matter what’s going on in the broader market. When a company reports pitiful earnings, its share price is going to get crushed. When it reports strong earnings, its share price is going to jump.
In other words, big movements in individual stocks are built into the financial system at this time of year. In fact, they are a certainty, simply because we’re in earnings season.
This gives us an incredible opportunity.
We’ve already seen a number of well-known companies report earnings, most notably Apple (NASDAQ: AAPL), which announced on Oct. 27.
Just a few days before Apple reported, Jared weighed in on the company:
Once a stock market darling, Apple has fallen into an undeserved funk. Earnings are expected to be reported Tuesday after market close, and even though my proprietary earnings algorithm is forecasting a beat for the tech giant, the stock has a reputation for being unpredictable following its reports.
The good news is that with a little statistical analysis and the right strategy, we can greatly increase our chances of profiting from Apple’s post-earnings move.
He went on to say that with valuation metrics near a 10-year low and with his proprietary earnings algorithm projecting a beat, it seemed like the perfect time to buy.
But as Jared mentioned, Apple is well-known in trading circles for its unpredictability after earnings reports. According to Bloomberg, the stock has made an average daily move of 4.4% following its earnings reports. But while the company beat expectations in each of the past four quarters, calling the direction (up or down) of that initial post-earnings move has been a “crapshoot” in Jared’s words.
Jared’s deeper statistical analysis added some certainty, though. It showed that in the past two years, shares were higher 75% of the time 30 days after Apple reported earnings.
As Jared predicted, the tech giant reported better-than-expected earnings and the stock closed 4.1% higher the next day.
Not bad for the world’s largest company by market capitalization. Stocks this big rarely see such significant one-day moves. But using an options strategy, Jared was able to bag an 18% gain in seven days. That works out to an astonishing 931% annualized gain.
This has become par for the course for Jared and his followers. By using his earnings algorithm, they’re able to profit from the quick upside and downside moves in stocks during earnings season.
Jared has developed a trading strategy specifically designed for these moments. As some stocks jump and others plunge, he uses it to make quick gains of 40% or 50% again and again.
Just look at some of the returns he’s made based on his earnings algorithm:
— 51% on Kinder Morgan (NYSE: KMI) in eight days (2,308% annualized)
— 30% on Wynn Resorts (NASDAQ: WYNN) in nine days (1,234% annualized)
— 40% on Yelp (NYSE: YELP) in 29 days (509% annualized)
— 34% on Keurig Green Mountain (NASDAQ: GMCR) in 56 days (221% annualized)
He’s also profited from popular names like Amazon.com (NASDAQ: AMZN), Mattel (NASDAQ: MAT) and many others.
If this sounds too good to be true, just know that Jared has been using his trading strategy during earnings season since he was a teenager. In fact, it helped him make $600,000 by the time he was 18.
It was shortly after that, at 19, when a member of the Philadelphia Stock Exchange took note of Jared and brought him on board. Soon Jared was bringing in millions of dollars for wealthy clients. In a few years, he was able to buy a house for his mother. And eventually, he had enough to retire from Wall Street.
Here’s why I bring all this up… We’re in a bit of a lull right now in terms of big, market-moving news. But earnings are moving individual stocks — just as they should be.
There’s no telling how much longer it will last — my guess is through the December Fed decision on interest rates — so now is the time to strike. Savvy investors will embrace this window of opportunity to profit while they can.
Jared still uses his earnings algorithm strategy whenever earnings season comes along, and he’s been able to steer his Profit Amplifier readers to gains of 20% in five days, 70% in 12 days and even 123% in 43 days.
He just released a new presentation detailing how his algorithm works and how you can use it to make the same kinds of profits he and his readers make every week. To view the presentation, visit this link.