Stocks to watch

On early Tuesday we are going to see if we are going to jump into Shoe Carnival before it announces the next day on Wed. Monday of course, the US markets are closed due to the American Holiday 'Labor Day'. Usually I like to get into a stock on the three day drop at least two days before, as advance insider information starts to leak out about the results before the actual official results come out. But in this case due to the markets being closed on Mon, we are going to see if Shoe Carnival is still kind of up and hasn't sold off yet. If it is still up in the morning, we are going to purchase some Sept 20.00 puts. The plan is that when the stock announces on Tues, the results are going to be average or worse than average and seeing that the stock has climbed in anticipation of these earnings results, any gain or upside is already going to be priced in the stock and people are going to sell it off. This of course if it works out like this, will cause our put to jump in price, perhaps 30% overnight.
Buy the rumor, sell the news. Thats how a lot of the general public plays earnings announcements. During the 2 weeks before earnings announcements, people start to pile on a stock and when it announces, they sell it off, providing the stock hasn't announced anything amazing.
According to analysts, shoe carnival isn't going to come out with anything amazing, so if this is true, this means that the general public was wrong piling on this stock as the momentum climbed all the way to earnings.
Have yourself a good weekend. The 2-3 day QQQ chart and the 2-3 week QQQ chart has been updated in the Sandbox, so dont forget to check that out.

Happy Trading!
Mark