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For most traders, 2011 was a difficult year of trading and investing. Market volatility, the Euro crisis, an S&P downgrade of the US, and major indices ending lower (among others), all played a major role in creating an anxious, apprehensive, and uncertain investor. We certainly would have liked to see some 'normalcy' in the markets, but the issues didn't stop our data from realizing some great trading opportunities.

We found a silver lining in all the mayhem. Our earnings trade alerts gave us positive results in 10 out of 12 months in 2011. We wanted to review the best earnings trades of 2011 that we provided our clients. These companies are called 'whisper reactors', and they are the companies most likely to see price strength when they top the whisper number, and weakness when they miss. (And for those that don't know; the whisper number is an earnings expectation collected from the investment public. The whisper number data published by WhisperNumber.com is proven to provide greater returns when used as an investment vehicle, and has a greater impact on stock movement than analysts consensus estimates.)

2011 Year in Review: The Top WhisperNumber.com Earnings Trade Alerts

* Top Overall Return: Bank of America

We issued a short position alert on July 19th after Bank of America (BAC) reported earnings fourteen cents short of the whisper number. Our data indicated an average price move of -11.5% in fifteen trading days. The stock dropped $3.24 in that period for a 33.2% short position profit.

* Top Long Position Performers: Blyth, Rite Aid

We issued a long position alert on April 8th after Blyth Industries (BTH) reported earnings eighteen cents ahead of the whisper number. Our data indicated an average price move of +21.5% in fifteen trading days. The stock gained $6.24 in just seven trading days and we issued an early exit alert for a 16.0% long position profit.

We issued a long position alert on June 23rd after Rite Aid (RAD) reported earnings three cents ahead of the whisper number. Our data indicated an average price move of +13.8% in thirty trading days. The stock gained $0.17 in twenty-seven trading days and we issued an early exit alert for a 14.9% long position profit.

* Top Short Position Performers: Bank of America (see above), State Street

We issued a short position alert on July 19th after State Street (STT) reported earnings five cents short of the whisper number. Our data indicated an average price move of -10.7% in twenty-five trading days. The stock dropped $9.39 in twenty-three trading days and we issued an early exit alert for a 22.3% short position profit.

* Top Q1 2011 Long Position Performers: Omnivision, Baker Hughes

We issued a long position alert on February 25th after Omnivision (OVTI) reported earnings thirty-eight cents ahead of the whisper number. Our data indicated an average price move of +11.0% in twenty-five trading days. The stock gained $3.77 in just five trading days and we issued an early exit alert for a 13.1% long position profit.

We issued a long position alert on January 25th after Baker Hughes (BHI) reported earnings thirteen cents ahead of the whisper number. Our data indicated an average price move of +10.8% in twenty-five trading days. The stock gained $7.80 in just four trading days and we issued an early exit alert for a 13.0% long position profit.

* Top Q1 2011 Short Position Performers: Expeditors International, CIT Group

We issued a short position alert on February 22nd after Expeditors International (EXPD) reported earnings two cents short of the whisper number. Our data indicated an average price move of -8.1% in twenty-five trading days. The stock dropped $5.49 in four trading days and we issued an early exit alert for a 10.3% short position profit.

We issued a short position alert on February 15th after CIT Group (CIT) reported earnings six cents short of the whisper number. Our data indicated an average price move of -25.5% in twenty-five trading days. The stock dropped $4.70 in that period for a 10.1% short position profit.

* Top Q2 2011 Long Position Performers: Blyth Industries, Rite Aid (see above Top Long Position Performers)

* Top Q2 2011 Short Position Performers: Urban Outfitters, Marvell Tech

We issued a short position alert on May 17th after Urban Outfitters (URBN) reported earnings two cents short of the whisper number. Our data indicated an average price move of -5.2% in fifteen trading days. The stock dropped $3.49 in that period for a 10.8% short position profit.

We issued a short position alert on May 27th after Marvell (MRVL) reported earnings two cents short of the whisper number. Our data indicated an average price move of -4.0% in twenty trading days. The stock dropped $2.76 in seventeen trading days and we issued an early exit alert for a 17.1% short position profit.

* Top Q3 2011 Long Position Performers: TJX Companies, Petsmart

We issued a long position alert on August 16th after TJX Companies (TJX) reported earnings two cents ahead of the whisper number. Our data indicated an average price move of +8.6% in twenty-five trading days. The stock gained $5.64 in that period for a 10.7% long position profit.

We issued a long position alert on August 18th after Petsmart (PETM) reported earnings two cents ahead of the whisper number. Our data indicated an average price move of +8.1% in twenty-five trading days. The stock gained $4.24 in twenty trading days and we issued an early exit alert for a 10.5% long position profit.

* Top Q3 2011 Short Position Performers: Bank of America (see above), State Street (see above)

* Top Q4 2011 Long Position Performers: Bank of America, Apogee Enterprises

We issued a long position alert on October 18th after Bank of America (BAC) reported earnings thirty-five cents ahead of the whisper number. Our data indicated an average price move of +19.4% in fifteen trading days. The stock gained $0.92 in eight trading days and we issued an early exit alert for a 14.7% long position profit.

We issued a long position alert on December 15th after Apogee Enterprises (APOG) reported earnings eight cents ahead of the whisper number. Our data indicated an average price move of +14.8% in fifteen trading days. The stock gained $1.38 in six trading days and we issued an early exit alert for a 11.9% long position profit.

* Top Q4 2011 Short Position Performers: Dow Chemical, Comcast

We issued a short position alert on October 27th after Dow Chemical (DOW) reported earnings four cents short of the whisper number. Our data indicated an average price move of -24.1% in twenty-five trading days. The stock dropped $3.80 in twenty trading days and we issued an early exit alert for a 13.3% short position profit.

We issued a short position alert on November 2nd after Comcast (CMCSA) reported earnings eleven cents short of the whisper number. Our data indicated an average price move of -10.5% in twenty-five trading days. The stock dropped $2.48 in sixteen trading days and we issued an early exit alert for a 10.5% short position profit.

* 2011 Most Consistent Performers:

- State Street (STT); Four earnings alerts issued, two long (topped whisper), two short (missed whisper), all profitable, average profit +9.4%

- Marvell Tech (MRVL); Four earnings alerts issued, three short, one long, all profitable, average profit +5.8%

- Big Lots (BIG); Four earnings alerts issued, three long, one short, all profitable, average profit +5.3%

- TJX Companies (TJX); Three earnings alerts issued, two long, one short, all profitable, average profit +8.2%

- Northern Trust (NTRS); Three earnings alerts issued, three short, all profitable, average profit +4.9%

The most consistent performers were based on those companies where we issued three or more alerts for the year, all stocks moved as expected, and all were profitable.

On the contrary, we had only one company that pitched us a trading shut out, and that was Eastman Chemical (EMN). We issued four alerts (three long, one short), and all went against expectations with an average loss of 5.4%. All other 'multiple alert' companies had at least one quarter of positive results.

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When analyzing the data we collect, the most important aspects are how a company reacts to beating or missing the whisper number, the average post earnings price movement, and in what timeframe (see link in profile to receive alerts). Keep in mind that trading on whispers is a technical play on market psychology, rather than a bet on a company's fundamental strengths.

A company's 'reaction' to the whisper number expectation is the key - on average companies that exceed the whisper are 'rewarded', while companies that miss are 'punished' following an earnings report.

According to The Wall Street Journal, "the percentage of companies that have beaten expectations often is cited as a barometer of corporate profitability, an indicator of how well the economy as a whole is doing or a predictor of where the stock market is going. What goes unsaid, however, is that these positive surprises are becoming so common they are nearly universal. They are predetermined in a cynical tango-clinch between companies and the analysts who cover them. And there is no reliable evidence that the stock market as a whole will earn higher returns after periods with more positive surprises."

"In short, there isn't anything surprising about earnings surprises. They aren't the exception; they are the rule. "All the numbers are gamed at this point," says James A. Bianco, president of Bianco Research."

Whisper numbers provide the unbiased earnings expectation proven more significant than the analysts estimates.

All trading involves risk and the information presented is not intended to be a recommendation of any kind.

Source: 2011 Earnings Trades In Review