Earnings Season Is Upon Us

Earnings season kicks off Monday after the close when Alcoa ($AA) reports. The market has had a nice run and many of the sentiment indicators are skewed in favor of the bulls. 1300 seems so close yet so far away. We really don’t know what to expect this earnings season as companies can beat and raise and still trade lower. Just make sure that you know when positions you are in report but also know that pre-announcements can occur as well.

Earnings season is a time to manage risk but also seems that many use it as a time to gamble. Don’t be that “trader” who goes for the long shot without defined risk. Just because you feel good about your research or a hunch doesn’t mean the stock will do as you expect. Remember, we are but a small part of the market and our opinions means very little.

I’ll be watching the weekly chains for some plays with well defined risk and share them here.  Keep in mind though that earnings season is a time of year when fundamentals, sentiment and emotion tend to trump technicals. Manage risk and live to trade another day!