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Ocean Man
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I have been an active investor for almost 20 years. My main focus is on high-yield stocks, particularly MLPs, and high-growth oil companies in the Eagle Ford shale. I have a portion of my portfolio allocated to short-term trading, with a focus on over-reactions to company news and directional... More
  • How I Like To Play Earnings 185 comments
    Aug 12, 2013 7:09 AM | about stocks: CPSS, PFMT, PSIX

    Have you ever heard someone say "I don't like to play earnings."? I agree with where they're coming from. If you buy a stock on Thursday that reports Thursday night or Friday morning, it could open down 10% or worse. That's a lot of risk. A much less risky way to play earnings, is to see what the earnings are first, and buy after the open with a stop that lets you limit your losses. A lot of people have asked me to describe my methods around this type of play, so I'll describe the details here.

    Finding the Companies to Play

    What you're looking for are the overlooked companies while all eyes are on the bigger names that day. I'll use Friday, August 9th, 2013, as my example. You'll want to implement this on a day with more than 20 companies reporting earnings, so mostly during "earnings season" each quarter. First, read through Seeking Alpha's Market Currents Friday morning. Ignore any companies that missed on EPS or revenues or both. For companies that beat on both, look for the companies that beat on revenues by more than 10% or close to it. EPS can be inflated by buybacks, one-time benefits, and creative accounting gimmicks, but sales are sales. Consumers either bought a company's products and services, or they didn't. In recent quarters, a lot more companies have beat on EPS than on revenues, and even fewer beat revenue estimates by a large amount. The companies that reported Thursday night sometimes work too, but don't work as well for reasons that I'll explain below. You'll mainly want to target companies that are not trading in the pre-market. This play can work with companies that have traded that day in the pre-market, but it doesn't work as well.

    Setting Your Opening Bid

    The starting point for your opening bid will be 1% higher than the prior day's close. This can be adjusted higher for several reasons. First, I'll put the bid a little over the prior day's high if that's higher than my 1% starting point, but no more than 3% over the prior day's close. This is because you're trying to snag sell orders that were left open from the previous day. Second, you want to look at the pre-market bid. If that's higher than your 1% starting point, you may want to move up your bid to just above the pre-market bid, but again, no more than 3% over the prior day's close. Third, if the company absolutely blew away estimates by an astounding amount, or if the company is more well-known, you may want to start your bid at 2% or 3% over the prior day's close. You are not attempting to buy the stock in the pre-market, but you are placing your order before the open so that it is live at the open.

    Researching the Company

    This step will determine how large a position you want to play each company with, or which company to play if you've identified more companies than you're willing or able to play. First, take a look at the recent price action. Companies that have run up into earnings may have been expecting a beat. Companies that didn't run up into earnings will work more often, and for larger gains. Second, take a look at the short interest. I use Key Statistics on Yahoo Finance for this. The higher the short interest, the better this play will work, in most cases, as the beat could trigger a short squeeze. Third, and this is the most important step, scan the recent headlines on both Yahoo Finance and Seeking Alpha's Market Currents. You are looking for any recent bad news that could outweigh the beat's good news. Examples could be a CEO resignation, a recent acquisition that could require a secondary offering, a credit downgrade, or anything that could suggest that stockholders are looking to get out on the next jump. If you find a red flag like this, cross the company off of your list. I also tend to ignore MLPs, as they tend to not react as much to quarterly earnings reports.

    You may have noticed that a proper due diligence was not part of this exercise. That could be a controversial point to some people, and a deal-breaker for others. In performing this play, you are assuming that good or bad findings in a proper due diligence are already priced into the stock price by the market. You are saying, all else equal, this new news is going to take the stock up. However, part of the reason this strategy works is that the news came out shortly before the market opened, and you are buying before all of the people who buy later in the day after doing their due diligence first. This is also the reason that companies that report Friday morning work better than those that report Thursday night.

    Next Moves After the Open

    First, if one of your bids fill, place a stop 2% below the price you paid. You can set whatever risk limit you want, or vary it by how volatile the stock is, but I have chosen 2%. Second, if a company is trading just above your bid for the first few minutes of trading, go ahead and move up your bid.

    If you get stopped out, the play is over. Don't try to get back in. Some will dip and then take off again, but that action is outside of this strategy. If a stock gaps up more than 3% and stays up there, cancel your order. Some will gap up big and take off much higher, but those are also outside of this strategy. Be prepared for a lot of your bids to not fill, and some days where none of your bids fill. The reason this strategy works is because you are patient for the ones that start off slow and then make you a lot of money.

    When to Sell

    You are going to sell sometime the same day. If you hold past the close, you expose yourself to a gap down the next day far greater than your 2% stop loss. The safest strategy is to keep moving up your stop as the stock gains. However, this can lead to always selling 2% off the highs to that point of the day, which doesn't maximize gains. Also, how soon you choose to start moving up your stop can be a crucial decision. Moving it up quickly can limit gains in some cases and protect gains in others. I tend to move mine up slowly early in the day to give the stock a chance to run. Some traders will choose to try to sell a peak at some point of the day to get a little more, although that can lead to selling too early. It is a trade-off that is left up to each trader.

    Returns

    I have had great success with this strategy. I've also had countless near-misses where my bid didn't quite fill and the stock took off. The great thing about this strategy is that you don't even need a 50% success rate for it to be profitable. Even if you lost 2% on 2/3 of your attempts, if you averaged over 4% on your gains on the other 1/3, you would make money. I suggest paper-trading the strategy first to hone your skills before playing for real money.

    Real Examples From Friday, August 9th, 2013

    The first example is Power Solutions International (NASDAQ:PSIX). PSIX reported a revenue beat of $5.2M over an estimate of $53.9M. I'd call this close enough to 10%. EPS beat an estimate of $0.21 by $0.02. The stock closed the prior day at $46.39. An opening bid 1% higher would have been $46.85. The stock did not trade higher than $46.85 the prior day, nor was it a beat by an astounding amount, so I would not have adjusted the bid up from there. The stock had not run up by a large amount into earnings, nor did I see any red flags, so it was in play. The bid would have filled at the open for $46.00. If it didn't, the stock still traded around $46.97 for about 15 minutes, so I would have moved up my bid to that level if needed (only 0.25% higher). If you filled at $46.00, your stop would be placed at $45.08. Less than an hour later, the stock was at $50 (up 8.7%). Your stop would have moved up to $49, and an hour later you would have stopped out for a 6.5% gain.

    The second example is Performant Financial (NASDAQ:PFMT). PFMT reported a revenue beat of $7.2M over an estimate of $62M, more than 10%. EPS beat an estimate of $0.21 by $0.02. The stock closed the prior day at $11.07. An opening bid 1% higher would have been $11.18. The stock did trade a little bit higher the day before, up to $11.18, so I would have adjusted the bid up by five or ten cents, let's say $11.28 (less than 1% more). The stock had not run up by a large amount into earnings, nor did I see any red flags, so it was in play. The bid would have filled five minutes into trading for $11.20, although if you were trying to buy more than $8,000 worth, you may have only received a partial fill. Your stop would be placed at $10.98. Ten minutes later, the stock was at $11.66, and if you're really fast at moving your stops by the minute, you might have been stopped out as it dipped back to $11.43 about 15 minutes later for a 2% gain. Personally, I don't move my stops that fast. I'm watching a lot of stocks each day, and I like to give these room to run, and $11.66 wasn't that big of a jump, so I wouldn't have moved it up yet. Your stops are trying to limit your losses; protecting gains is a secondary priority. Four hours later, the stock was at $12 and stayed there a while. I would have moved my stop up by this point, eventually settling into $11.76. It never dipped back to that point, so I would have sold near the end of the day around $11.85 for a 5.8% gain.

    The third example is Consumer Portfolio Services (NASDAQ:CPSS). CPSS reported a revenue beat of $33M over an estimate of $37M, more than 90%. EPS beat an estimate of $0.14 by $0.01. The stock closed the prior day at $6.42. An opening bid 1% higher would have been $6.48. The stock did trade a little bit higher the day before, up to $6.56, plus I would consider this an astounding beat, so I would have adjusted the bid up the full 3% max to $6.61. The stock had not run up by a large amount into earnings, nor did I see any red flags, so it was in play. The bid would have filled at the open for $6.59. Your stop would be placed at $6.46. Again, if you were really fast at moving your stops by the minute, you might have been stopped out as it dipped from $7.08 back to $6.94 about 20 minutes later for a 5.3% gain (not bad). If you hadn't moved it up yet, the stock moved up to $7.23 an hour later and you may have been stopped out from there a while later at $7.09 for a 7.6% gain. Either way, a nice gain.

    Another example that fits our strategy from Friday morning is Tremor Video (NYSE:TRMR). Our bid would not have filled however, as it gapped up 12% at the open. It's a good thing our strategy tells us not to chase these gap-ups, as 40 minutes later the stock had given back the entire opening gain.

    Closing Thoughts

    First of all, this is a day-trading strategy, not an investment strategy. Second, Friday was a day where this strategy worked really well. It doesn't always work this well, but it has been a winning strategy for me over a long period of time. Try paper trading it first, try adjusting your stop loss limits, or your max bid amount to catch a few more 4% or 5% gap-ups, see what types or sizes of companies it works best with, and you might come up with an even better set of rules.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Themes: earnings Stocks: CPSS, PFMT, PSIX
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Comments (185)
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  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » One thing I forgot to mention: If the company lowers guidance, or guides below consensus along with their beat, cross the company off your list. Guidance often trumps a beat, and usually mutes the play's effectiveness.
    12 Aug 2013, 08:44 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Here is how the Thursday night reporters would have fared:

     

    MEET - gapped up 17%. Good thing we don't chase because it dropped 19% from there.

     

    LXU - would have produced a 9.4% gain.

     

    NKTR - would have produced a 13% gain.

     

    MDVN - would have stopped out for -2%.

     

    This is pretty typical for the night before reporters. Less of them will work, but a few will work quite nicely.
    12 Aug 2013, 08:48 AM Reply Like
  • Fred Piard
    , contributor
    Comments (654) | Send Message
     
    Hi OM, Thanks for sharing!
    I have backtested a "surprise-based" strategy a couple of months ago. I'm not a day-trader: my models are mostlty weekly rotations and usually I Keep It Simple and Stupid... This one is in the Russell 1000 universe, avoids extremely high valuations and selects stocks with an EPS surprise above 15%. If there are more than 10, I have a simple ranking to keep only 10. I have added a conditional hedging (shorting SPY when my market timing indicator is bearish). Strange thing: adding a high short interest is bad in this model, however eliminating stocks that have no short interest (are not shortable???) reduces the risk without significantly improving the return.
    Simulation since May 1999 with trading cost+spread = 0.5% (which looks conservative in this universe): CAGR 22%, max DD 30%, sortino>1 . The 10 positions have been always filled since 1999. This is really KISS: no exit condition, stocks stay in the portfolio until they are pushed out by other ones.
    To be honest I don't use it because I have more promising models, but I don't exclude to work more on it. I might write a more detailed article if I have time.
    Thanks again for all your stocktalks, I often read your position on inverse VIX ETFs to confirm my setups...
    Fred
    12 Aug 2013, 12:56 PM Reply Like
  • bd4uandu
    , contributor
    Comments (1902) | Send Message
     
    Hey OM thanks for giving some insight into your process. At first I thought it was mostly magic but it turns out you use a lot of uncommon common sense and hard work imagine that. I am curious as to resources you use, mostly SA and Yahoo finance?
    12 Aug 2013, 09:10 AM Reply Like
  • joe kelly
    , contributor
    Comments (1787) | Send Message
     
    I get messages time to time from people asking whom I follow. I give them the names like yours and truffle Pig and others but I caution them to just use what they learn and not try to follow their moves as they don't have time to post everything they do in real time.

     

    I rarely day or swing trade as I suck at it but seeing how someone who knows what he's doing operates is good to know. More success to you.
    12 Aug 2013, 09:17 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » There was only one company that fit the criteria this morning. Can you name it? Did you play it?

     

    There was another company that fit the revenue beat criteria, but failed the research step. Can you name it and how it failed? Did you see what followed?
    12 Aug 2013, 09:56 AM Reply Like
  • nclsamy
    , contributor
    Comments (115) | Send Message
     
    Enanta Pharmaceuticals Inc. $ENTA I didn't play it. But it would have been a nice profit. Am I right?
    12 Aug 2013, 10:02 AM Reply Like
  • bd4uandu
    , contributor
    Comments (1902) | Send Message
     
    PBA?
    12 Aug 2013, 10:07 AM Reply Like
  • Ocean Man
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    Comments (578) | Send Message
     
    Author’s reply » Samy gets a gold star.
    12 Aug 2013, 10:57 AM Reply Like
  • nclsamy
    , contributor
    Comments (115) | Send Message
     
    Thank you, OM! Wonderful written article. Can't wait to test your method.
    12 Aug 2013, 11:06 AM Reply Like
  • Ocean Man
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    Comments (578) | Send Message
     
    Author’s reply » PBA's beat wasn't reported in SA's Market Currents until after it had jumped up today. The play is only as good as its source for news.
    12 Aug 2013, 11:04 AM Reply Like
  • Perkins Cove
    , contributor
    Comments (634) | Send Message
     
    Agreed. Also, very good article OM.
    12 Aug 2013, 11:50 AM Reply Like
  • Ocean Man
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    Comments (578) | Send Message
     
    Author’s reply » The other company that beat revenues, but failed the research step was MOBI because it jumped from $3.80 to $4.60 the day before. A 21% jump the day before earnings is a warning sign for "sell the news". MOBI opened down 3.8%, so you would have filled, and then it promptly dropped another 9% in the next 8 minutes.
    12 Aug 2013, 12:42 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » ENTA beat revenues by 126% and beat EPS. 1% above the prior day's close would have been $17.85, but ENTA had traded as high as $17.89 the day before plus it was a very large percentage beat, so I raised my bid to $18.02, 2% above the prior day's close. I filled at the open at $18.00 and placed my stop at $17.64. The stock traded up another 5% from there to $18.91 over the next 20 minutes. I eventually moved my stop up to $18.54 and stopped out a couple hours later for a gain of 3%.
    12 Aug 2013, 12:57 PM Reply Like
  • weed
    , contributor
    Comments (47) | Send Message
     
    Been trying to reverse engineer your method for a while now. Thanks for posting this.
    12 Aug 2013, 02:01 PM Reply Like
  • sikday1
    , contributor
    Comment (1) | Send Message
     
    Thanks for a great article and sharing some insight OM!!
    12 Aug 2013, 06:20 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » As I said yesterday, a system is only as good as its source info, and SA makes a lot of mistakes in their Market Currents. If you're looking to play this today, don't believe for a second that SPR beat revenues by a billion $, the real estimate was $1.5B - not in play, and don't believe that BRSS beat a $36M estimate by $425M, the real estimate was $435M - not in play, although still a pretty nice quarter. I don't know why SA didn't compare IOC's EPS to an estimate, there was an estimate, and they missed - not in play.
    13 Aug 2013, 09:28 AM Reply Like
  • nclsamy
    , contributor
    Comments (115) | Send Message
     
    What about INSY? They beat estimation quite nice. Wouldn't that fit your system? They're up 8,7% from the open.
    13 Aug 2013, 09:36 AM Reply Like
  • Perkins Cove
    , contributor
    Comments (634) | Send Message
     
    Oberman, agree again on your comment regarding SA. I believe having multiple sources is prudent. SA is behind Briefing by 6 to 2 in my current tabulation, and I am sure there are other good sources out there. So far SA's Market Currents is behind the curve when it comes to timely info. Hope they can improve.

     

    Sorry your article didn't get approved, and thank you for blogging it. Better luck next time.

     

    Cheers,
    Perk
    13 Aug 2013, 10:38 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » INSY gapped up 5.3%, TPH gapped up 6%, and PFSW gapped up 3.6%. I had reasons not to play PFSW - too much run-up, up 10% in the second half of yesterday's session, also had big beats the past 2 quarters so this was not a big surprise.

     

    Too bad on INSY, up 18% now.

     

    Only one order filled..... can you name it?
    13 Aug 2013, 10:01 AM Reply Like
  • nclsamy
    , contributor
    Comments (115) | Send Message
     
    INSY...wow. Did you buy ARPI? About 5% profit in less than an hour.
    13 Aug 2013, 10:59 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » I didn't play ARPI because it reports FFO rather than EPS, but it did get a nice little jump in a red market.
    13 Aug 2013, 11:26 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Today's play is one of last night's reporters, CCXI. I really liked the setup on this one - down 13% the past 4 weeks into earnings, no pre-market bid above the prior day's close. You can still get in on this one, it's pausing due to the market drop.
    13 Aug 2013, 11:00 AM Reply Like
  • nclsamy
    , contributor
    Comments (115) | Send Message
     
    Was watching ccxi too. Managed to get in. Thank you, OM!
    13 Aug 2013, 11:09 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » CCXI bought at $12.76, sold at $13.04. Gain of 2.2%.
    13 Aug 2013, 03:45 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » INSY is a good example of the heartbreak this system can yield, when one opens just above your max bid and then jumps up 31% in one hour.

     

    Rules could be adjusted to allow a higher bid when a company raises guidance as part of their beat, could be a winning move.
    13 Aug 2013, 11:31 AM Reply Like
  • fvelezdevilla
    , contributor
    Comments (18) | Send Message
     
    HCLP was the best bet for today I think.... got almost 3%....
    14 Aug 2013, 09:55 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Nice job fvelez! HCLP opened less than 1% above the prior day's close, then rose 3.7% from there.

     

    SVA gapped up too much at the open to fill.

     

    ATHX beat, but had red flags. First, with a $1 share price, a lot of big players are not buying and selling. Second, it closed at $1.70 yesterday, and the pre-market bid/ask spread was $1.60 by $1.71. That should give you serious bad vibes. That spread was bracketing a 3% drop, plus why would you bid 1% above the prior day's price when you can buy it for a penny above in the pre-market (and nobody is buying)? A good one to avoid.
    14 Aug 2013, 01:08 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » HCLP today was a good example of where selling 2% off of the day's high was the worst place you could possibly sell. Congrats to those who chose to sell higher or who moved their stop up slowly, you may have gained closer to 3.5% instead of the 1.5% gain generated from moving your stop quickly.

     

    Week to date results:

     

    Monday +3%
    Tuesday +2.2%
    Wednesday +1.5%
    Cumulative +6.8%
    14 Aug 2013, 04:31 PM Reply Like
  • Dr. Kris
    , contributor
    Comments (334) | Send Message
     
    OM,

     

    Great article, concisely written. One question: I'm wondering if you're setting real stops or are your stops mental?

     

    Paper trading this or any other "recipe" is very important. In your strategy, I see that trying to figure out the proper exit point is the tough part and the one where having some experience would be of benefit.

     

    Can't believe SA didn't pick this one up--guess it wasn't alpha-rich enough.

     

    Dr. K
    14 Aug 2013, 05:38 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Thanks Dr Kris. The stop 2% below the initial buy is real and immediate. The stop that moves up with the stock price sometimes works better if it follows a little bit lazily.
    14 Aug 2013, 06:24 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » There were a couple reports between last night and this morning with a qualifying revenue beat, but EPS were only "in line". This is similar to where I said a 10% beat "or close to it" on the revenue check, if you want to get aggressive with the play, go ahead and play an in-line EPS if the revenues were an impressive beat, but I wouldn't play an EPS miss no matter how small.

     

    I also wouldn't get too excited about EGAS today. It had a similar report last quarter and didn't go anywhere. NTES is another one that had a good report last quarter and finished the next day in the red. Those could work, but consider last quarter's results when deciding which company to play or position size between several.
    15 Aug 2013, 09:09 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Nothing too exciting today. CUI bought at $5.79, sold at $5.75 for -0.7%. CEP bought at $2.21, sold at $2.22 for +0.4%. Total on the day -0.1%.

     

    Better than losing 1.45% on the S&P today though, huh?
    15 Aug 2013, 04:03 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » CUI went up 7.6% the next day. LOL.
    16 Aug 2013, 05:24 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Not a lot of choices today. EJ gapped up 14%, so no play. I called CCSC close enough on the revenue beat and bid 2% above the prior day's close at $7.02. Filled a few minutes into trading.
    16 Aug 2013, 09:52 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Should have sold that one for $7.35 for a gain of 4.8%, but didn't move my stop up fast enough. Sold for $7.29 which was more than 2% below the day's high. Win some, lose some with that strategy. Gain of 4%. Maybe some of you fared better.
    16 Aug 2013, 11:07 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » This week's results:

     

    Monday +3%
    Tuesday +2.2%
    Wednesday +1.5%
    Thursday -0.1%
    Friday +4%
    Cumulative +11%

     

    S&P -2.1%
    16 Aug 2013, 05:19 PM Reply Like
  • Perkins Cove
    , contributor
    Comments (634) | Send Message
     
    Do you think you could maintain that over a year? 11% x 52wks = 572%

     

    I assume this is the 10% you set aside for day trading?

     

    Good blog and good job !
    17 Aug 2013, 03:16 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Thanks PC. It's mainly played during earnings season, so it's more like 20 or 24 weeks of the year, but it still annualizes out pretty well.
    17 Aug 2013, 04:55 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Bid $1.03 for GRH and filled at the open (for $1.027 to be exact).

     

    EVK was a borderline play for aggressive traders. Beat big on revenues, but had no EPS estimate, so can't really say it beat EPS, but you could say it didn't miss. Anyway, one could have bought this at the open up 2% at $3.00 and now it's up 13%. I won't count this one in the results, but notice that some of the borderline qualifiers do quite well.
    19 Aug 2013, 10:06 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Sold at $1.05 about a half hour after it hit $1.07. Gain of 2.2%.

     

    EVK was up 25% at one point.
    19 Aug 2013, 11:17 AM Reply Like
  • nclsamy
    , contributor
    Comments (115) | Send Message
     
    Nice profit on GRH. EVK was an excellent buy, unfortunately I saw the market current too late. Next time. Thank you again for the system!
    19 Aug 2013, 11:44 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » TSL was the only qualifier I saw for today. Bid $6.98 at the open, 3% over yesterday's closing price, and missed filling by 9 cents. It promptly shot up from $7.07 to $7.44, +5% in just a couple of minutes. So close.
    20 Aug 2013, 09:41 AM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    Tweaking this a bit, HAIN could have been played Thursday PM to Friday open for 4-5%.
    22 Aug 2013, 10:44 AM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    Would have had to be willing to pay 6% premium over the Thursday close, but beats like this (with raised guidance) often good for 10%+.
    22 Aug 2013, 10:47 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Filled on QIWI at $34.12, 2% above yesterday's close.

     

    Missed on ANFI, gapped up 13%.
    27 Aug 2013, 09:33 AM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    Did you fill premarket or at the open?
    27 Aug 2013, 10:34 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Yahoo's chart makes it look like it never got down there, but the day's range says it traded under $34.
    27 Aug 2013, 11:32 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Small gain of 2.1% today, but nothing to complain about on a day when the S&P dropped more than 1.5%. Couple of chances to take a 4% gain on this one early, but I stayed with the stop method.
    27 Aug 2013, 04:08 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    With your fill, you could have cashed-out up $1/share, like you said not bad at all on a very red day.
    27 Aug 2013, 06:07 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    It ran up a bit into earnings, and the with the overall market sentiment today, I ruled-that out (QIWI). Good beat though. Interested to see how it works out, good luck.
    27 Aug 2013, 10:27 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » SDRL previous close of $43.73, plus 3% was $45.04, filled one minute into trading. I went 3% because it was trading over $44.20 the day before and was up 3%+ in the pre-market. Never dropped 2% below its high for the day. Sold near the close at $45.43. Gain of 0.9%. Little wins on 1-day holds add up.

     

    JOY also qualified on the revenue and earnings beats, but was trading down 6% in the pre-market, a red flag, so I avoided it.

     

    TIVO was borderline. EPS beat, but adjusted EPS didn't, but that one would've made you 3% if you gave it the go-ahead.
    28 Aug 2013, 03:54 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Cumulative results through 2 1/2 weeks:

     

    Instablog System:
    Week 1 +11%
    Week 2 +2.2%
    Week 3 +3%
    Total: +16.8%
    Note: This system does not give a buy signal every day (a sign of a good system!)

     

    S&P over that period: -3.2%
    28 Aug 2013, 04:03 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    Would have adjust bid from +2 to +2.5% from previous close to catch HEI. Didn't think the % beat justified that.
    28 Aug 2013, 04:04 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Yeah, HEI was only a 5% revenue beat.
    28 Aug 2013, 04:13 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    Have been auditing these when I can. Seems a corollary could be added for top-line beat, 10%+ bottom beat and raised guidance--actually seems OK to chase those up to 5%, they usually do 7-10%.
    28 Aug 2013, 05:39 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    CSTM, ELTK, NPD, MY..figures without estimates aren't helpful, is there another information source in real-time, or would I have to find the estimates elsewhere?
    29 Aug 2013, 06:37 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » You can look on Yahoo under Analyst Estimates on each ticker's page to fill in some of the gaps in the SA reports.
    29 Aug 2013, 08:38 AM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    Thanks.
    29 Aug 2013, 03:56 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Bids on EGAN and MEI didn't come close to filling. Both gapped up double-digit percentages. Like Jane Says, try again tomorrow.
    29 Aug 2013, 02:14 PM Reply Like
  • nclsamy
    , contributor
    Comments (115) | Send Message
     
    Was watching MEI. Nice YTD performance. Can't wait for the next earnings season to come. Thank you again for this, OM.
    29 Aug 2013, 02:25 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    VRNT this morning--not strictly meeting criteria, but with PM low 34.80 and PM high 36, some guys who got up early made a little $. I would not have thought this beat justified bidding so far over the previous close.
    4 Sep 2013, 10:11 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Interesting. I tried bidding on SPA, but it gapped up too much.
    4 Sep 2013, 12:08 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    Did some post-mortem and was fascinated that QIWI with that huge beat settled right back to pre-earnings pop, and would have made an excellent trade at that point. These picks have potential beyond earnings.
    4 Sep 2013, 12:25 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    FCEL just in-line on top, but ginormous bottom beat. +12% AH.
    4 Sep 2013, 07:42 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » After a lull in between earnings seasons, the Ocean Man Instablog Earnings Trading System comes roaring back into play. Actually, not much of a roar, more of a soft meow, as only ONE company met the criteria the entire first week last week. That company was EXPO, bought at Thursday's open for $72.60:

     

    http://seekingalpha.co...

     

    And sold at the close for $75.00 for a gain of 3.3%.
    23 Oct 2013, 10:50 AM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    Market was way behind you, pushing it near 80 but not for a few days after.
    23 Oct 2013, 10:00 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » After another 2 days of nothing triggering the criteria, 3 names emerged as plays for Wednesday.

     

    RUSHA was bought at the open for $28.94, 1.7% above yesterday's close. Revenues beat by 12%.

     

    AKR was bought at the open for $26.25, below yesterday's close. Revenues beat by 37%.

     

    LO was the third name. It met the revenue criteria, but it's an $18B company, so not really the under the radar, forgotten type of company we're looking for. It's more of a headline company, so I didn't play it. I might have played it if there weren't two other companies to play today, but the other two looked like better plays.
    23 Oct 2013, 11:16 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Stopped out of RUSHA for a gain of 1.7% at $29.42.

     

    Sold AKR for a gain of 1.9% at $26.75, an hour before the close because I'm heading to lunch. Might be more there in the last hour, your choice.

     

    Total / average = +1.8% today.
    23 Oct 2013, 03:10 PM Reply Like
  • Pursuing Financial Freedom
    , contributor
    Comments (30) | Send Message
     
    Ocean Man- How can I determine if the company trades in the pre-market?
    23 Oct 2013, 04:23 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Yahoo's quote pages show the latest pre-market trade, but the best place to check is under pre-market activity on nasdaq.com.
    23 Oct 2013, 04:40 PM Reply Like
  • Pursuing Financial Freedom
    , contributor
    Comments (30) | Send Message
     
    Thank you for the response. I look forward to practicing this strategy soon and hopefully implementing in the next cycle. May I ask what trading platform you like to use? Also, what cost per trade % do you suggest I try to stay under? Thanks again!
    23 Oct 2013, 04:52 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    It seems to me the Market Currents aren't feeding as much complete data as last earnings season.
    23 Oct 2013, 09:58 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Lots of names meeting the criteria today, after so many days without. That's a good thing, as many of our targets gap up above our buy orders. Here's today's plays, which anyone should have been able to identify by themselves without me pointing them out (which is the idea of publishing the above blog entry):

     

    SLG was bought at the open for $94.69.

     

    AWH came down to my +2% bid of $108.22 about 5 minutes into the session.

     

    NVEC was bought at the open for $53.10.

     

    ALK was bought at the open for $68.31.

     

    CWEI was bought at the open for $71.30. That one was kinda funny since I already owned it LOL.

     

    AEM, EVR, and IXYS gapped up too high and didn't fill.

     

    STC also met the criteria, but in doing a quick search on all of these names to make sure they didn't lower guidance, I saw a very negative comment from the STC CEO that convinced me not to play it:

     

    "Our third quarter 2013 financial results reflect a changing industry environment. The steady improvement in the residential resale market was not sufficient to offset the decline in refinancing title orders, slowing the rate of revenue growth," said Matthew W. Morris, chief executive officer. "In addition, the ongoing improvement in the housing market, with the attendant reduction in distressed properties, resulted in our mortgage services revenues declining more than previously expected."
    24 Oct 2013, 11:49 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Turns out STC would have made a nice play today despite the early weakness LOL. Another great today, here are the results:

     

    Sold SLG at $96.82 for a gain of 2.2%.

     

    Sold AWH at $107.10 for a loss of 1%.

     

    Sold NVEC at $53.70 for a gain of 1.1%.

     

    Sold ALK at $69.79 for a gain of 2.2%.

     

    Sold CWEI at $79.65 for a gain of 11.7%.

     

    Average gain on the five: +3.2% today.
    24 Oct 2013, 03:57 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Trading System since inception (August 12th):

     

    Last earnings season: +16.8%
    Last week: +3.3%
    This week: +5.0%
    Total: +26.7%

     

    S&P over that time: +3.6%
    24 Oct 2013, 04:03 PM Reply Like
  • det9
    , contributor
    Comments (49) | Send Message
     
    Awesome OM. I was not paying attention but will.. Thanks.
    24 Oct 2013, 05:35 PM Reply Like
  • broohaha
    , contributor
    Comments (3) | Send Message
     
    Very well done. Surprised you didnt buy WLL.
    24 Oct 2013, 09:18 PM Reply Like
  • fvelezdevilla
    , contributor
    Comments (18) | Send Message
     
    LPNT 4 to 5% up today....
    25 Oct 2013, 11:19 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » LPNT's revenues were up 10% from the prior year, but revenues only beat estimates by 1%. Hope you made some money on it though!
    25 Oct 2013, 01:11 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Six names met the criteria for today, or at least it would appear....

     

    UACL had incorrect information on SA's Market Currents last night. They wrote it up originally with a huge beat, then corrected it to a miss.

     

    ELY and MKTO gapped up too high to fill our bids.

     

    IMI had the revenue beat, but guided below consensus.

     

    IMGN filled at $17.59, 2% over the prior day's close.

     

    MXWL filled at $7.60, 2.7% over the prior day's close.
    25 Oct 2013, 01:21 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Stopped out of MXWL at $8.23 for a gain of 8.3%.

     

    Sold IMGN at $17.70 for a gain of 0.6%.

     

    Total / average = +4.5% today.
    25 Oct 2013, 03:42 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Trading System since inception (August 12th):

     

    Last earnings season: +16.8%
    Last week: +3.3%
    This week: +9.7%
    Total: +32.4%

     

    S&P over that time: +3.9%
    25 Oct 2013, 03:47 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Today's plays were MAC and PRE.

     

    MAC filled at the open below the prior day's close at $58.50 and was sold at $58.29 for a loss of 0.36%.

     

    PRE filled at the open at $97.80 and was sold at $100.08 for a gain of 2.33%.

     

    Total / average = +1% today.
    29 Oct 2013, 03:36 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Note: for anyone who missed filling on PRE due to bidding 1% or 2% over the prior day's close, the pre-market bid on PRE was $97.25 which was 2.4% over the prior day's close, and there were no pre-market trades meaning no one was willing to sell to that $97.25 bid. So there was a pretty clear signal that this one would take the max +3% bid in order to fill.
    29 Oct 2013, 03:40 PM Reply Like
  • Karembeu
    , contributor
    Comments (14) | Send Message
     
    @ OM,

     

    Was $PRE, in your opinion, a big enough beat to warrant a +3% bid in order to try and get the order filled? I chose to go with $VLO instead due to the higher pre-market bid on $PRE.

     

    Filled at open for $VLO at $39.88 and ended up getting stopped out @ $40.15 for a 0.7% gain. I think I moved my stops too quickly on this one as it was staying at $40.50 for quite some time!

     

    Wished I could have captured some bigger gains today but all in all, not bad for my first day trying to implement your system :)

     

    As always, thanks OM!
    29 Oct 2013, 06:11 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » That's another way to look at it, Karembeu, and a great point. If you're deciding between a couple of choices to play, you might look at PRE requiring a +3% bid as a reason to play an alternate name.

     

    Part of the strategy of this system is to sneak into the big beats that get ignored while all eyes are on the big names / headliners reporting that day. VLO is not AAPL, but it's a pretty big name and a $20B company, so I wouldn't consider it a target with this play. But I'm glad it worked for you, that's a nice gain for one day.
    29 Oct 2013, 06:47 PM Reply Like
  • Karembeu
    , contributor
    Comments (14) | Send Message
     
    Thanks for the reply, OM. That makes sense; I definitely did not take into consideration the market cap of $VLO nor did I go back enough on the chart to see that it ran up before earnings, like brian mentioned.

     

    Just glad I didn't lose money on it lol.

     

    Saw $QCOR after the bell and wanted to take a position, seeing that it was -6% AH but had a weird feeling about it. Just seemed too good to be true given that huge beat. Good thing I didn't act on it because SA later updated that it was due to the investigation.

     

    Staying away from that one!

     

    Here's to hoping tomorrow is a great day for your system!
    29 Oct 2013, 09:51 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    $VLO ran up pretty hard into earnings; I interpreted this as the beat being "priced in" and would not have played for that reason.
    29 Oct 2013, 06:21 PM Reply Like
  • Karembeu
    , contributor
    Comments (14) | Send Message
     
    Ok good point...I probably was in too much of a rush trying to pick $PRE or $VLO I only looked back a week or two and didn't notice it was up 15% in the past month.

     

    Good thing it still worked out for me, kinda LOL!
    30 Oct 2013, 03:57 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » There were a lot of qualifiers last night and this morning. Last night included BXP, ATRC, TRLA, TTWO, EIX, and QCOR. I crossed off QCOR due to negative news, TTWO because fan-boy video game stocks don't trade right, and BXP because the pre-market bid/ask spread was an ugly $100 by $106 after a previous day close of $108. This morning included AEGR, TASR, DXYN, and LGND.

     

    ATRC, TRLA, AEGR, and TASR gapped up too high to fill.

     

    EIX filled at $49.65 and later stopped out for a 1.4% loss.

     

    LGND filled at $57.23 and pretty quickly stopped out for a 2% loss.

     

    DXYN saved the day, filling at $11.35 and later stopping out at $12.94 for a 14% gain.

     

    Total / average = +3.5% today.
    30 Oct 2013, 11:09 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Today's plays:

     

    SPRT, GLUU, GCAP, and SPWR were trading down and/or had gap-down bid/ask spreads in the pre-market.

     

    FLDM, ZLTQ, and CRR gapped up too high to fill.

     

    ARRY filled at $5.40 and stopped out for a 2% loss.

     

    Q filled at $43.75 and stopped out for a 2% loss.

     

    IVZ filled at $33.50 and later stopped out at break-even.

     

    QUIK filled at $3.90 and later stopped out at $4.07 for a 4.4% gain.

     

    ITMN filled at $13.33 and later stopped out at $14.22 for a 6.7% gain.

     

    Total / average = +1.4% today.
    1 Nov 2013, 12:21 AM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    THRM would have been real good today.
    1 Nov 2013, 12:25 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Friday's plays:

     

    HEES, CALD, EPAY, OEH, and FSLR gapped up too high to fill.

     

    MTZ filled at $32.04.

     

    KRG filled at $6.13.
    1 Nov 2013, 09:50 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » MTZ stopped out at $33.47 for a 4.5% gain.

     

    KRG stopped out at $6.30 for a 2.8% gain.

     

    Total / average = +3.6% today.

     

    Cumulative total for the week = +9.8%.
    1 Nov 2013, 03:22 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Trading System since inception (August 12th):

     

    Last earnings season: +16.8%
    Two weeks ago: +3.3%
    Last week: +9.7%
    This week: +9.8%
    Total: +45.3%

     

    S&P over that time: +4.1%
    1 Nov 2013, 03:26 PM Reply Like
  • macberry
    , contributor
    Comments (28) | Send Message
     
    I dipped my toe in the ocean man strategy today and bought a tiny position in ARSD. They reported after close but the market current on SA published this morning.

     

    It closed yesterday at 9.10, i put my bid at the open for 9.25 and got filled at 9.15. I sold at 9.70 for a 5.7% gain. It actually closed up only 2 cents on the day so i can see how the stops are key.

     

    So ocean, was ARSD a play true to your strategy or was it beginners luck?
    1 Nov 2013, 05:51 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Way to go mac! ARSD didn't beat revenues by more than 10%, but it was a borderline play within the strategy so great job.
    1 Nov 2013, 09:27 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Today's play was AER, filled at $20.87.
    4 Nov 2013, 12:05 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Sold AER at $21.45 for a gain of 2.8%.
    4 Nov 2013, 03:44 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Today's plays: RBA, REGN, AFH, PMC, and SB gapped up and didn't fill. THC was crossed off due to a $42 by $46 bid/ask spread in the pre-mkt vs. a $48 previous day closing price, SA said that ENH beat revenues but Briefing.com said it didn't, and AGII was crossed off since it had only been trading for 5 days.

     

    ISIS filled at $34.00 and quickly stopped out for a 2% loss.

     

    HIL filled at $3.68 and later stopped out for a 1.6% loss.

     

    CVU filled at $12.50 and was sold at $12.98 for a 3.8% gain.

     

    KBALB filled at $11.35 and was sold at $11.83 for a 4.2% gain.

     

    AFSI filled at $38.16 and was sold at $40.67 for a 6.6% gain.

     

    Total / average = +2.2% today.
    5 Nov 2013, 07:26 PM Reply Like
  • macberry
    , contributor
    Comments (28) | Send Message
     
    Is there anything that can learned from how a pick like ISIS acted today? Down on a big earnings beat (by this criteria anyways). Cant win them all of course but may as well try.

     

    Next earnings season im in on this.. Can't come soon enough.
    5 Nov 2013, 07:55 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » The biopharmas are notorious for "selling the news" on good news, but they can also produce some of the largest gains when they work.
    5 Nov 2013, 10:55 PM Reply Like
  • DAG1996
    , contributor
    Comments (3450) | Send Message
     
    Good stuff, Ocean. Thanks for sharing.
    5 Nov 2013, 08:47 PM Reply Like
  • Kevin Chapman
    , contributor
    Comments (48) | Send Message
     
    I dipped my toe in this morning on 2 based on your strategy... they also happened to be 2 I have been looking at from a longer term perspective:

     

    FOR: Limit order before the open at $22.55 (originally at $22.15 then revised up), filled at $22.31

     

    EPR- Limit order at before the open at $51.80, filled at $51
    6 Nov 2013, 10:18 AM Reply Like
  • Kevin Chapman
    , contributor
    Comments (48) | Send Message
     
    FOR had a fairly wide bid/ask (the ask in the pre was $24.11). It seems like there might have been some fills around the $24/sh mark to start the day.

     

    I also looked at a few biopharms but based on your prior reply and my lack of knowledge about the space decided against it.
    6 Nov 2013, 10:30 AM Reply Like
  • Kevin Chapman
    , contributor
    Comments (48) | Send Message
     
    out of FOR at $22.19.
    6 Nov 2013, 11:24 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » EPR and SUNE working today. Nice job Kevin!

     

    Missed MIG by a PENNY and then it shot up 8.5%....
    6 Nov 2013, 12:05 PM Reply Like
  • Kevin Chapman
    , contributor
    Comments (48) | Send Message
     
    I looked at MIG too as well as EZCH, REGI and MYGN. All seemed to be up in the pre market and having no experience trading in the pre I decided not to play.

     

    That EPR seems to have worked to perfection so far...
    6 Nov 2013, 12:10 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Today's plays: AXAS, REGI, XEC, SPA, MIG, and BCOR gapped up and didn't fill. SA said RGR was a beat, but Briefing.com said it was a miss, MYGN was up 9% in the pre-market, CHK is more of a headliner than what we're looking for, and YY has unaudited Chinese results, so all of those were crossed off.

     

    EOX filled at $8.85 and stopped out for a 2% loss.

     

    FURX filled at $36.32 and stopped out for a 2% loss.

     

    SGEN filled at $38.80 and stopped out for a 1% loss.

     

    FOR filled at $22.31 and stopped out at break-even.

     

    EPR filled at $51.23 and was sold at $52.45 for a 2.4% gain.

     

    SUNE filled at $10.69 and stopped out at $11.49 for a 7.5% gain.

     

    Total / average = +0.8% today.
    6 Nov 2013, 04:27 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Today's plays: DXCM, BZH, PBH, and GNK gapped up and didn't fill. CODI's pre-market bid/ask spread was below the previous day's close, and SCTY was down 9% pre-market, so both were crossed off. I also crossed off ATVI due to lowering guidance and down 3% pre-market, but it would have worked for a 6% gain. Doh.

     

    AAON filled at $28.86 and stopped out for a 2% loss.

     

    LNT filled at $52.72 and stopped out for a 0.6% loss.

     

    RGEN filled at $11.28 and stopped out for a 0.3% loss.

     

    ARQL filled at $2.21 and stopped out for a 0.9% gain.

     

    OILT filled at $58.00 and was sold for a 1.8% gain.

     

    Total / average = Break-even today.

     

    Today's big regret was ONE. It was a borderline play, which opened up 2.8% and proceeded to rise 27%. That would've been nice to catch.
    7 Nov 2013, 06:59 PM Reply Like
  • det9
    , contributor
    Comments (49) | Send Message
     
    OM, percentages are great. How does that relate to dollars? How many shares should be bought so the percentages really count? I did not check the stock prices of these but just curious.. Thanks.
    7 Nov 2013, 10:55 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » That's for each person to decide on their own. Everyone has different charges per trade at their broker, risk tolerances, etc.

     

    I'd say you'd want probably $3,000 to $5,000 minimum per position to keep broker charges at a reasonable percentage, but it depends on the broker.
    8 Nov 2013, 03:29 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Today's plays: MITK, NKTR, LCI, ECPG, BCEI, CYTX, HZNP, and OLED all gapped up and didn't fill.

     

    FF filled at $17.57 and stopped out for a 2% loss.

     

    EBS filled at $18.98 and stopped out for a 12.7% gain.

     

    Total / average = +5.4% today.
    8 Nov 2013, 03:32 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Trading System since inception (August 12th):

     

    Last earnings season: +16.8%
    3 weeks ago: +3.3%
    2 weeks ago: +9.7%
    Last week: +9.8%
    This week: +11.6%
    Total: +62.2%

     

    S&P over that time: +4.4%
    8 Nov 2013, 03:36 PM Reply Like
  • det9
    , contributor
    Comments (49) | Send Message
     
    Thanks OM. Broker fees are ok but if somebody buys more of one company and less of other, outcome could be unpredictable. But if they allocate same dollar amount regardless of quantity then the system is even..
    8 Nov 2013, 04:26 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » No action today, as there were only 3 candidates and all 3 gapped up more than 3% - GOGO, CYD, and CTIB.

     

    CYD missed filling by only 7 cents (0.3%), then rose more than 7% from there. A heartbreaker.
    11 Nov 2013, 09:08 PM Reply Like
  • cornell3206
    , contributor
    Comments (2) | Send Message
     
    Been paper trading this approach for a couple weeks now and decided to take my first shot yesterday. Bought SNSS @ $5.07 and sold @ $5.14 for a 1.4% gain. I'll take it for a first effort. Thanks OM.
    13 Nov 2013, 06:47 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Nice job cornell!
    14 Nov 2013, 01:00 PM Reply Like
  • subrkaus3
    , contributor
    Comments (80) | Send Message
     
    Awesome blog OM! Will try out your strategy soon!
    5 Dec 2013, 03:06 PM Reply Like
  • macberry
    , contributor
    Comments (28) | Send Message
     
    Its almost go time. TFSA (tax free account) is loaded and ready.

     

    Are you still playing OM?
    13 Jan 2014, 09:57 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » 1/30/14:
    ININ gapped up too far at the open.
    PRXL filled at $48.80, sold at $49.42 for a gain of 1.3%.
    SLG filled at $91.71, sold at $93.85 for a gain of 2.3%.
    DRE filled at $15.07, sold at $15.51 for a gain of 2.9%.

     

    Overall gain for today: +2.2%.

     

    System to date: +65.7% in 5 months.
    30 Jan 2014, 03:51 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Somebody PM'd me that they played PLD for a 5% gain using this system this morning. I don't know how I missed that one, fit the criteria perfectly and would have been the biggest winner of the day. Oh well. LOL.
    30 Jan 2014, 10:05 PM Reply Like
  • MMRPM
    , contributor
    Comments (25) | Send Message
     
    go go OM! Based on your research on earnings report - sold $ATK
    @$144 and $UA @105.25 in AM. Bought back $ATK @$133 in the afternoon. Hoping to do the same with $UA soon as I am long both companies. Thxs OM for insights.
    30 Jan 2014, 04:20 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » A big red day in the market can be a headwind to a long / momentum strategy like this. Tread carefully, play for smaller amounts, or hit the sidelines for a day. When people are selling the indices, there is downward pressure on all stocks. They can go up, but it's into the wind.
    31 Jan 2014, 08:55 AM Reply Like
  • jamesingram32
    , contributor
    Comments (633) | Send Message
     
    fascinating system Ocean, thanks for sharing.
    7 Feb 2014, 05:22 PM Reply Like
  • jamesingram32
    , contributor
    Comments (633) | Send Message
     
    CIBER today? I'm just watching, not trading
    11 Feb 2014, 08:13 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » CBR did well today, but gapped up a little too much for this play. Same with OTTR. I've been really busy with work lately and haven't been able to research this each day, but hopefully it's working for other people.
    11 Feb 2014, 10:11 PM Reply Like
  • jamesingram32
    , contributor
    Comments (633) | Send Message
     
    ah yeah, I see, it opened already up 8%.
    Glad work is busy...that is a good sign! :)
    12 Feb 2014, 03:29 AM Reply Like
  • Renmycat!
    , contributor
    Comments (717) | Send Message
     
    IO (ion geophysical) should meet this criteria, so hopefully it doesnt gap up too much at the open tomorrow.. its up over 6% in AH though, so we see
    12 Feb 2014, 05:21 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Bought SLG at $102.10. Beat earnings by 12%, beat revenues by 33% (up 41% Y/Y), and raised guidance.... a lovely combination.
    24 Apr 2014, 09:57 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Was up 2.4% at one point, finished with a 1.2% gain, not bad.
    24 Apr 2014, 08:38 PM Reply Like
  • jamesingram32
    , contributor
    Comments (633) | Send Message
     
    sure beats my NOK holding. Closed the MSFT deal today and pretty much announced the new CEO, and....the share price falls......arrrrgh

     

    maybe Tuesday will bring us a dividend...

     

    congrats on your system ocean
    25 Apr 2014, 05:32 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Bought the open on AEGN at $23.65.

     

    Tried to buy HURN at $64.45. It opened at $65 and shot up to $70. Doh.
    30 Apr 2014, 09:54 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » And $25.53 makes a gain of 8% in one day.

     

    Not.
    Too.
    Shabby.
    30 Apr 2014, 03:46 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » System through last quarter: +65.7% in 5 months.
    Last week's gains: +1.2%.
    Today's gains: +8%.

     

    System to date: +81% in 8 months.
    30 Apr 2014, 03:50 PM Reply Like
  • jamesingram32
    , contributor
    Comments (633) | Send Message
     
    whao...congratulations...

     

    thanks for posting Ocean. Look forward to seeing the next...if I'm alert enough I can try and jump in on it too
    30 Apr 2014, 05:53 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Made 0.5% on KRC and 2.5% on PDM today.

     

    Two other qualifiers I noted but didn't play, also produced gains: +1.3% on IPI and +0.8% on AKR.

     

    Average of +1.5% on the two I played.
    1 May 2014, 03:50 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Today's post is about Good Til Canceled orders. Let's say a stock was trading at $23.95 with 15 minutes to go in the session on a Tuesday. The stock starts to tank into the close and closes at $23.60 (a drop of 1.5% in 15 minutes). You also notice that the volume was abnormally high, much, much higher than normal. This is a situation where a lot of people saw the stock starting to drop fast, put in limit sell orders, and saw those orders not get filled, as the stock tanked too fast and then the bell rang ending the session. Some of those orders will likely be Good Til Canceled orders, which will remain open into the next day (some people just enter their orders that way).

     

    That evening you see some good news come through in the after-hours for that company. Your hope is that maybe some people didn't see that news, maybe some people didn't interpret that news as very, very good, or maybe some people just didn't bother to cancel their GTC orders. This happens more with smaller, less popular stocks, especially when a lot of earnings news for big, popular stocks is dominating the headlines (the theme of this blog).

     

    The next morning, you don't see any pre-market trades, but you see the bid/ask spread on this company is a lot higher than the previous day's close, something like $24.25 by $25.00. That means the bid, which no one is accepting in the pre-market, is 2.75% higher than the previous day's close. That tells you there is a good likelihood that this stock is going to trade higher that day, but you also know there are some GTC orders likely sitting out there just above yesterday's closing price.

     

    So what I do, is I put in a regular session bid (not a pre-market bid) just above the previous day's closing price, but the key is: I put it in really early. I put it in more than an hour before the session opens. My theory is, the market makers have to match up the bids that come in with the asks that were left open from the previous day, and they'll do it first-come, first-served if they're not playing favorites. They're more likely to just get it over with on these unpopular stocks.

     

    So on the stock in our example, I put in a bid of $23.65, just a nickel above the previous day's close, hoping to catch a GTC ask left open. And guess what happened?

     

    The stock in this example is AEGN, and the example is a true story. It's a theory I've been experimenting with for a while, and it's been working a lot lately. I filled at $23.65 Wednesday (4 days ago), which you will see as the opening price for AEGN on Yahoo Finance on Wednesday. What you'll also see, is that the average price paid during the first nine minutes of trading was $24.18, and 90 minutes later the stock was at $25.25, pretty much perfectly tracing the bid/ask spread we saw in the pre-market. You could've sold there for a gain of 6.7% in 90 minutes, or held for $25.59 a few hours later (+8.2%).

     

    This isn't foolproof, but it works a good percentage of the time when the setup is similar to what I described above. You won't always fill, in fact most of the time you won't, but if you do fill once every 5, or even 10 tries, you could make some nice quick gains, and you don't lose anything when you don't fill. The time-saver, is that the candidates for this idea, are a subset of the candidates you're searching for in the earnings trading strategy above in this blog, so it doesn't take any additional time. Good luck trading everyone!
    4 May 2014, 10:28 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » I should mention that I actually bid $23.75 in that example, to widen my net of possible GTC orders I might snag, and just got matched up with a $23.65 ask.
    4 May 2014, 10:45 AM Reply Like
  • jamesingram32
    , contributor
    Comments (633) | Send Message
     
    thanks for the posts ocean. They make complete sense.
    4 May 2014, 04:06 PM Reply Like
  • 683
    , contributor
    Comments (50) | Send Message
     
    Although I am very new at this, I am already realizing that I will need to have a few different strategies or systems to take full advantage of the market.

     

    thank you for the new day trading strategy
    4 May 2014, 02:49 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    Ocean--used a modified version to play $EJ today--got a very fortunate fill @ 8.70..--thanks--BD
    20 May 2014, 01:36 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Bought the open on AZZ at $43.00.
    27 Jun 2014, 09:34 AM Reply Like
  • nclsamy
    , contributor
    Comments (115) | Send Message
     
    Amazing entry! Nice!
    27 Jun 2014, 09:53 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Sold for $44.97.

     

    Intra-day gain of 4.6%.
    27 Jun 2014, 03:50 PM Reply Like
  • nclsamy
    , contributor
    Comments (115) | Send Message
     
    Congrats, OM!
    27 Jun 2014, 03:55 PM Reply Like
  • Barinder Sangha
    , contributor
    Comments (83) | Send Message
     
    Nice trade.
    27 Jun 2014, 05:37 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    Did you base the bid on premarket activity, or just the usual 2-3% the strategy calls-for?
    27 Jun 2014, 07:47 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » I bid 3% above the prior day's close at $43.30 and filled at $43.00.
    27 Jun 2014, 07:57 PM Reply Like
  • Edge Investing
    , contributor
    Comments (74) | Send Message
     
    Can I ask what percentage of your portfolio you apply to each trade that uses this strategy?
    27 Jun 2014, 07:59 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » On average about 15%.
    27 Jun 2014, 09:50 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    thanks Ocean. Sometimes tempting to chase on big beats. Good discipline you have with this strategy. have a good weekend.--BD
    27 Jun 2014, 08:36 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    I was just curious what the bid/ask spread was like PM.
    27 Jun 2014, 08:37 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Bought OPB at $29.90 and MCY at $48.07.
    28 Jul 2014, 09:58 AM Reply Like
  • Martin_Kostka
    , contributor
    Comments (15) | Send Message
     
    Didn't PGC qualify today? EPS beat by 15%, revenue +26.6 Y/Y...
    28 Jul 2014, 10:57 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » PGC's revenues were up nicely, but didn't beat an estimate by 10% (according to SA).
    28 Jul 2014, 11:32 AM Reply Like
  • Martin_Kostka
    , contributor
    Comments (15) | Send Message
     
    I couldn't find any information on revenue estimates, hence the question to you, OM :-)
    28 Jul 2014, 12:01 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Lost 1.6% on one and made 2.0% on the other.
    28 Jul 2014, 03:25 PM Reply Like
  • 683
    , contributor
    Comments (50) | Send Message
     
    Hey OM wanna say thanks. Put in order for GALE 1 hour b4 market open on the 7/22. Saw the news and premarket price action. Got it at 2.88 Sold at 3.01. :)
    28 Jul 2014, 06:02 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Nice job 683.
    28 Jul 2014, 08:49 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Bought STRT at $63.42.
    6 Aug 2014, 09:41 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Sold at $67.90. Gain of 7.1% intra-day.
    6 Aug 2014, 03:32 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    I think you beat the S&P today ; )
    7 Aug 2014, 12:16 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » MDVN and MTX were my plays today.
    8 Aug 2014, 10:26 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Made 6.5% on MDVN and 3.5% on MTX.

     

    Avg for the day +5.0%.
    8 Aug 2014, 06:23 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Cumulative gain for the week: +12.5%.

     

    Cumulative gain since publication: +116.5%
    (in a little less than a year)
    8 Aug 2014, 06:27 PM Reply Like
  • NLTInvestor
    , contributor
    Comments (316) | Send Message
     
    how do you find out if they lowered guidance if SA doesn't report it ? the press release doesn't say they upped guidance or lowered guidance
    9 Aug 2014, 03:09 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » That's mentioned in the research section of the blog above. I go to Yahoo Finance and search the company news for negative headlines such as guidance changes.
    9 Aug 2014, 08:45 AM Reply Like
  • Nash016
    , contributor
    Comments (3) | Send Message
     
    Can you plz share the stock details while your doing it.
    11 Aug 2014, 05:23 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » I've given you the parameters so that I don't need to. But I'll give some pointers from time to time. :)
    11 Aug 2014, 09:56 PM Reply Like
  • Nash016
    , contributor
    Comments (3) | Send Message
     
    I followed it for QIWI but it did not work for me. So need some pointers to validate and make some profits.
    12 Aug 2014, 10:45 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » QIWI is a Russian stock trading with Russian war and sanctions news.
    12 Aug 2014, 11:29 AM Reply Like
  • Nash016
    , contributor
    Comments (3) | Send Message
     
    True , i need to consider war and sanction news before placing the order..
    12 Aug 2014, 12:04 PM Reply Like
  • nclsamy
    , contributor
    Comments (115) | Send Message
     
    OM, I hope you played $NOAH today. I missed my order, but it's up almost 6% from the lows. Thank you again for this strategy!
    12 Aug 2014, 12:57 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » I didn't play any today, lack of big names reporting, but you're right, NOAH moved up nicely after that initial dip.
    12 Aug 2014, 03:51 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    No time to trade today, but practicing screening on this strategy--like $GIII this morning.
    3 Sep 2014, 07:11 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » My 3% up bid missed at the open by a few cents and now it's up 21%.....
    6 Nov 2014, 10:36 AM Reply Like
  • mstar991
    , contributor
    Comments (44) | Send Message
     
    which one ?
    6 Nov 2014, 05:14 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Oops, ALG. Was up 30% before noon!
    6 Nov 2014, 10:23 PM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » MGNX working really well today.
    12 Nov 2014, 01:47 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    $CHKE and $LAYN both met criteria and 2% up bids from previous close would have returned nicely in under an hour today. I was feeling cheap and only up-bid 1% on $CHKE, didn't get filled.
    10 Dec 2014, 12:23 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    $MCS today, bid up 1%, not even close to filling, gapped up 6-7%. Thinly traded. 10% bottom line beat and good chart. Wasn't willing to overpay.
    18 Dec 2014, 09:55 AM Reply Like
  • Ocean Man
    , contributor
    Comments (578) | Send Message
     
    Author’s reply » Hard to fill when the market gaps up 30 S&P handles. Live to play another day.
    18 Dec 2014, 01:26 PM Reply Like
  • BTD70
    , contributor
    Comments (54) | Send Message
     
    Absolutely. Thanks Ocean. I like this best when market looks just slightly/moderately positive at the open--though I have noticed a lot of these plays do just fine on red days. Today's horse just too fast out of the gate.
    19 Dec 2014, 12:07 AM Reply Like
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