Thursday, October 18, 2012

GOOG Google 5-Minute Chart Waterfall Price Drop on Premature Earnings Release 'Pending Larry Quote'

GOOG bit the big one today. Earnings were scheduled for release, as always, after the closing bell. The earnings were released too early by their printers blindsiding the markets at 12:30 PM EST.  The earnings were weaker than expected so traders hit the sell button first asking questions later.  Price was moving across the 755 level and went off the edge of the cliff, dropping to 676 in only eight minutes time, about an 80 point drop, losing ten dollars in stock price per minute. Each candle on the chart above represents five minutes of trading time. The stock was halted from trading and then resumed trading at 3:20 PM where it finished the day moving thru the sideways blue channel shown above.  The earnings were officially released at 4:30 PM and did not change.

This is yet another stock trading debacle that Ma and Pa will point to proving the markets are nothing but a casino. Interestingly, all the GOOG long traders that planned on leisurely taking their profits in the afternoon, locking in gains, and not risking the earnings release, instead, were hosed. Price is in the vicinity of early September numbers, in other words, whoever bot GOOG over the last six weeks is now regretting it.

On the lighter side, since it is never funny to see folks lose their dough, the premature earnings release had a three word statement printed at the top; 'PENDING LARRY QUOTE'.  This is a placeholder where CEO Larry Page would provide a witty quip for the release, but, alas, all things imploded once the report was released too early.  To no surprise, the 'Pending Larry Quote' goes viral in today's day and age, Twitter is all a flutter, and the domain name was arleady secured by one entrepreneur.  This technology age is quite a circus.
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2 comments:

  1. ArnieOctober 19, 2012 at 12:14 AM

    scary IMHO, crashes occurring now left and right every week pretty much; black knight, kraft, india, etc. Signs of times to come?

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  2. Keystone SpeculatorOctober 19, 2012 at 5:19 AM

    Yep Arnie, it makes you wonder. That is why you have to stay at least somewhat diversified and always maintain exposure to the bull and bear side. Simply keep your net-net position weighted in the direction you feel the markets are going to move to.

    The interesting aspect is that many traders, retail investors, and perhaps some professional investors as well, do not realize the air that is under the markets. When there is air, there can be huge shocking gap down moves. Traders are completely complacent due to QE3 expecting the markets to be supported forever, who knows maybe they will be, and now that Europe has calmed a bit, everyone is feeling good, sipping booze, and having a good time. Be wary my friend, especially over the next month. Keep the mouse close to you over the next month, lots of wild action is likely ahead.

    If QE3 plans on supporting the markets forever, at some point, the traders will have to move markets lower to test exactly how strong the Fed's talk is.

    So, it will come to a head probably over the next month, we will see if the air below is a soft pillow, where price plummets only for a very short time and we bounce back up to current levels and higher for the broad markets, or, if price collapses thru the air below, and traders lose confidence in QE3, relaizing the QE's had diminishing returns and the easy money measures are now useless, and simply start to panic.

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