Unit 5 · Level 3 · Stocks Deep-Dive
Earnings season
Every quarter, public companies report results: revenue, profit, and guidance (their forecast). Stocks routinely move 5-15% on report night. You already know the master key from League 1: the move is driven by reality versus EXPECTATIONS, not by 'good' or 'bad' on their own.
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What you get asked
Company beats profit estimates but LOWERS next quarter's guidance. Stock falls 9%. Why?
Weaker guidance outweighs a beat that's already history. The quarter that just ended is old news; the forecast is the product. Guidance is routinely the real market-mover; watch how often headlines miss this.
Holding a position INTO an earnings report is best described as…
You learned gaps in League 1: price can open 10% away, past every stop. Pros either size for the gap, use options (League 4), or watch flat. Choose consciously.
A stock rising on a seemingly terrible report usually means the market expected even ___.
'Less bad than feared' is real rally fuel. Expectations are the invisible baseline under every headline, and now you see it.
Earnings season for a disciplined Formiga graduate means…
The reaction AFTER the report (gap, then direction with volume) is a real setup. The guess BEFORE it is a coin flip. React, don't predict. 🐜
The rest of this unit
ETFs, sectors, dividends and earnings season, plus the League 3 graduation.