Updated strategy for earnings releases

This strategy updates that of February 2015.

The important change is about assessing whether an equity responds to the DAX (GER30) or Wall Street (US30). This became important from lessons learned with Mallinkrodt in Respect the Indices. The SYP principle applies as always.

Another change is looking at the Williams Vix Fix – this is an indictor available to Tradingview chart users. It gives a fairly good alert about when price is about to move out of a trough.

2015-05-16_earnings release pattern analysis

It’s obvious that Mallinkrodt had been influenced heavily by the downward trend of the DAX (GER30). Shareholders decided in the last few days, following an earnings release,  not to be so influenced. It’s reasonably predictable based on the chart below that even if the DAX falls more, that Mallinkrodt may not fall as heavily. However, as always, such a prediction could well be wrong. The market is always right – is the golden rule.  Also of importance below is that the DAX was linked to the EUR/USD –and there’s little sign of that changing.

Screen Shot 05-16-15 at 12.00 AM

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