Timmothy Posey

Q3 Earnings Season: Not the Time to Get Short

Excellent points well made. I want to short this market but my origination for this article was to stay long during the Q3 earnings season (mostly through the end of October) and resist the temptation to get short. Notice I am not outright buying calls, I'm selling October puts which allows me a bullish-to-neutral stance on the market.

I'm mostly selling the SPY $100 puts, which collect a nice premium now, yet I think there is enough support for the market above 1000 on the S&P to support me doing so. Even if the market does nothing for the next two weeks I still come out a winner.

Q3 Earnings Season: Not the Time to Get Short

True, operational earnings should be the MacDaddy over reported earnings, but it's hard to ignore CNBC doing a 24/7 scrolling ticker of "Goldman Sachs reports best quarterly earnings ever due to trading and derivatives activity".

I included the insurers especially because often times their operations (selling insurance) isn't that great, but they make tons of RIGL (realized investment gains/losses); one could make the argument that investing/trading is part of their core business since that's what they do with the premium they collect.

As for shorting, I think a lot of folks jumped on the short bus last week. We went from the highs of 1080 to about 1020 in a matter of days. Or perhaps its just the low volume of buyers that were present for those days...