As traders we are always looking for patterns.  If we can spot a trading pattern that repeats itself (at least for awhile) we have an edge.  When people hear the word “pattern” they usually think of a visual pattern.  For traders this would typically be represented as a particular chart pattern.  For those of us who read the tape it might be a pattern we recognize on the Level II.  But the pattern I want to discuss today is a behavioral pattern.

In the two weeks since earnings season began it is VERY clear that the easiest money is made the second trading day AFTER a company reports their numbers.  It started with GS, then AAPL, then AMZN and today AET.  To be totally frank I haven’t capitalized on these great moves.

The following very simple setups occurred in the above stocks

1) GS after reporting great numbers traded in a tight range on heavy volume.  The following day when it went above the previous day’s high it ran 5 points.  By the way, this level had been highlighted by our own Jtoma on Fast Money about a month ago.

2) AAPL traded down to 155.55 the day after its earnings before having a 3 point up move.  This level had been previously identified by Gman in after hours trading as major support after AAPL released its numbers.  He shared it on our AM Ideas sheet for all traders on the desk.  I think he may have tweeted it as well.  I actually had an alert for this level but when it was triggered I had a large ebay position and I was too slow to set a stop order on my position before flipping over to AAPL.

3) AMZN traded below its 85.70 support from the prior afternoon and dropped over one point rather quickly.  Just a simple follow through to the downside on a stock that traded weakly after reporting so so numbers.

4) AET traded in a very small range yesterday after reporting numbers that the Street initially seemed not to like.  But AET was actually STRONG yesterday despite finishing negative on the day.  At 8:00AM yesterday I bought at $23 per share when the bid held.  The stock rallied very easily in the pre market and right on the Open to above $25 per share.  It closed in the upper 10% of its trading range.  So you should be on the alert for upside follow through today.  And we were.  We discussed a great entry point at 25.25 in the AM Meeting.  But we didn’t discuss WHERE to buy it on an upside breakout.  Not to hard to figure that one out.  After it filled the previous day’s gap to 26.50 you pay above that level.  Guess what happened?  2.5 point up move above 26.50.

Honestly, as I write these words I’m pretty angry, disappointed and frustrated with my lack of capitalizing on these moves.  It would be easy to say to myself well Steve you haven’t been trading the entire day for the past two weeks (other firm projects) so you are gonna miss some good moves.  Or you found better fresh In Play stocks so it is understandable that you missed some of those moves.  That would be nonsense.  It was clear over one week ago that this pattern was developing: good follow through in both strong and week earnings stocks.  This is a characteristic of a strong and healthy trading market.  As a professional trader it is my JOB to capitalize.

If you have been professionally day trading for more than one year and you trade stocks such as GS, AMZN, and AAPL then there really is no excuse for you not to have chopped it up in these names the past two weeks.

There are no excuses in TRADING (right Tom Hanks).