Unanalyzed: Take my money, please!

It's not easy to find trades during earnings season if earnings surprises scare you, as a trader, half to death.

That's the sort of trader I am, and today's list shows the consequences of that, as signal after signal is disqualified from the Watchlist because earnings are too close.

One reason for avoiding earnings is simply my style of trading: I trade current month or next month options, for the most part. An earnings surprise close to expiration can destroy the value of an option position, and remember that option trades are leveraged. I've learned to dread that sort of financial pain.

The other is one of control. Earnings announcements, revenue guidance, that sort of news -- it's all under the control of a small coterie of executives within each company. When I open a position when, historically, such announcements tend to happen, then I'm basically taking my money and putting under the control of a handful of people whom I've never met.

Same thing with analysts, who tend to concentrate their surprises in the month before earnings. Nice guys, I'm sure, but I don't want them holding my wallet for me.

It's for that same reason that I'm nervous about holding Fannie Mae (FNM), whose $1 price seems like a perfect speculative play. Fannie's future is tied up in Congressional regulation. If I buy FNM, it's like handing money over the Rep. Barney Frank. I like Barney. If I lived in Massachusetts I'd vote for him in a moment, because I think he's one of the smartest people in the House of Representatives. But I don't trust him with my meager wealth.

Overall, I don't want to say to small groups of stranger, "Take my money, please!" I would, of course, happily take their's, were it offered without strings.

So with that homily, the list of stocks who's signals are disqalified from the Watchlist.

• AMTD, bull, earnings too near (4/20), low adx (16)
• CAG, bear, earnings announcement
• GILD, bear, earnings near (4/20), low adx (9)
• GS, bull, earnings near (4/15)
• JDSU, bull, earnings near (4/29)
• MI, bull, eaernings near (4/22)
• MO, bull, earnigns near (4/21), low adx (14)
• MT, bull, earnings near (4/29), low adx (15)
• PAYX, bear, earnings announcement
• RHT, bear, earnings announcement
• SBUX, bear, analyst downgrade, earnings near (4/21), marginal adx (26)
• TSM, bull, earnings next (4/29), low adx (15)
• UAUA, bull, earnings near (4/20)
• VALE, bull, earnings marginally too near (5/5), low adx (18)
• VLO, bull, earnings near (4/27)

Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic