SINCE JULY 21, 1979

HALLOWEEN HANGOVER

 

 

 

https://www.howestreet.com/2025/10/stock-pullback-expected-after-big-surge-mark-leibovit/

There is no question that the far-left is controlling the Democrat party to the point of sedition risking civil war here in the U.S.  The Democrats refuse to accept they lost the election. The November 2024 election was a clear severance of Democrat policies including open borders, defending illegal criminals and supporting illegals financially. The question who is subsidizing the Democrats?  It can’t only be George Soros or his son.  Is the Chinese or Muslims who have infiltrated our government, the latter quite evident in New York City. Is it simply a function of those who took covid shots, drank the water in California or contracted the spreading the mental illness that supports transgenders, child sex change, rewriting history in our schools and, most importantly, questioning that the U.S. is based and founded on Judeo-Christian principles? We have a Pagan Threat according to Charlie Kirk!  They have invaded the U.S. and Canada just as they have throughout the centuries.

Now to the markets

Let’s talk about earnings season as a possible fraud!

According to ChatGpt: That’s a strong view — and one many skeptical investors share to some degree. While it’s an exaggeration to call all of earnings season “fraud”, your comment touches on a real structural criticism of the market:
insiders, institutions, and large funds often do have information or access advantages compared to retail investors.

Here are some points that support your skepticism — and some nuance to balance it:

⚖️ Why the system feels rigged

Analyst guidance “games”: Companies often manage expectations by leaking “guidance” or steering analysts lower before results, so they can then “beat” estimates — a psychological and market manipulation tactic.

Information asymmetry: Hedge funds and major institutions pay for alternative data (satellite imagery, credit card trends, supply chain metrics) that gives them early insight before official reports.

Earnings leaks: Despite strict rules (like Regulation Fair Disclosure), leaks still happen — via whispers, selective access, or trading patterns that hint at results before release.

High-frequency and algorithmic trading: These firms can react to earnings headlines within milliseconds, capturing price inefficiencies retail traders can’t.

🧾 Why it’s not outright fraud

SEC enforcement and Reg FD: There are legal frameworks meant to prevent insider advantage — though enforcement isn’t perfect.

Mandatory disclosures: Earnings reports themselves are audited and filed publicly, which provides at least a common dataset.

Market interpretation: Even with the same numbers, different players interpret results differently — which creates both opportunities and volatility.

Many long-term investors avoid the earnings-season noise altogether for these reasons — focusing instead on fundamentals and broader cycles rather than quarterly theatrics.

🧩 1. The Game Begins: Setting the Bar Low

Companies and analysts collaborate — indirectly — to set expectations that can easily be beaten.

In the months before earnings, management gives “guidance” (future profit and revenue estimates).

If management knows a weak quarter is coming, they quietly lower guidance, sometimes citing “macro uncertainty” or “FX headwinds.”

Analysts then cut their estimates accordingly.

When results come in slightly better than that low bar, headlines shout:
👉 “Company X beats expectations!”

Example:
If analysts expect $1.00 EPS, the company subtly guides down to $0.90.
Actual result: $0.95.
→ “Beat by $0.05!”
But it’s still below where expectations were two months earlier.

🧮 2. The Whisper Number

Behind the scenes, there’s often a “whisper number” — an informal figure circulated among institutions and hedge funds based on insider sentiment, channel checks, or “unofficial” leaks.
Retail investors see only the public consensus, but pros trade on the whisper.
So even if a company beats public estimates, if it misses the whisper, the stock tanks.

Result: A controlled system where insiders trade on an edge they cultivated themselves.

💬 3. Selective Communication

Before Regulation Fair Disclosure (Reg FD) in 2000, companies could legally brief favored analysts or funds before the public.
Even today, the “whisper network” continues through:

Private investor conferences

Sell-side analyst notes shared only with clients

Corporate “body language” in earnings calls (tone, word choice, even who gets called on for questions)

All these create informational asymmetry, even if technically “compliant.”

🧾 4. Buybacks & Accounting Magic

Companies can manipulate EPS without changing actual performance:

Stock buybacks reduce share count → boosts earnings per share even if profit doesn’t rise.

Non-GAAP accounting lets firms exclude “one-time” charges every single quarter.

Deferred revenue recognition shifts profit timing.

So “beats” can be engineered through financial optics, not business improvement.

💰 5. The Aftermath: The “Pop and Drop”

Wall Street institutions often front-run or fade retail reactions:

Big players position ahead of the print based on their read of channel data.

Retail traders react after headlines (“Beat!”), buying late into the spike.

Institutions sell into that surge — the “pop and drop” pattern many see during earnings week.

⚙️ In Summary

Earnings season isn’t pure fraud — but it’s a managed performance:

Expectations are scripted.

Access is unequal.

Optics replace fundamentals.

That’s why professional traders often say:

“Earnings don’t move the market — expectations do.”

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The major averages pulled back off their early highs in mid-day trading before moving back to the upside only to once again give back ground going into the end the session.

Despite the late-day pullback, the major averages all ended the day in positive territory. The Nasdaq climbed 143.81 points or 0.6 percent to 23,724.96, the S&P 500 rose 17.86 points or 0.3 percent to 6,840.20 and the Dow inched up 40.75 points or 0.1 percent to 47,562.87.

For the week, the tech-heavy Nasdaq surged by 2.2 percent, while the Dow and the S&P 500 advanced by 0.8 percent and 0.7 percent, respectively.

The early strength on Wall Street largely reflected a positive reaction to earnings news from Amazon (AMZN), with the online retail giant soaring by 9.6 percent on the day.

Amazon reached a new record closing high after reporting better than expected third quarter results amid a sharp increase in cloud computing revenue.

“The e-commerce division may have by far the bigger public profile but it’s the cloud services AWS division which is the real engine of Amazon’s growth and, it’s this which sparked the share price into life,” said AJ Bell investment director Russ Mould.

He added, “Demand for computing power linked to AI is showing no signs of letting up and that is driving significant growth for AWS, with third-quarter numbers helping to ease fears that this business was losing ground to rival operators.”

Netflix (NFLX) also turned in a strong performance on the day after the streaming giant announced its board of directors has approved a ten-for-one stock split.

On the other hand, iPhone maker Apple (AAPL) moved to the downside despite reporting fiscal fourth quarter results that exceeded analyst estimates and providing upbeat guidance for the current quarter.

Uncertainty about the outlook for interest rates also contributed to the volatility on Wall Street following Federal Reserve Jerome Powell’s remarks earlier this week.

While the Fed lowered interest rates by another quarter point as widely expected on Wednesday, Powell’s post-meeting remarks partly offset optimism about another rate cut in December.

Powell said a further reduction in rates in December is “not a foregone conclusion,” noting Fed officials had “strongly differing views about how to proceed” at the final meeting of the year.

Following Powell’s comments, CME Group’s FedWatch Tool indicates the chances the Fed cuts rates by another quarter point in December have tumbled to 65.0 percent from 91.7 percent a week ago.

Sector News

Retail stocks turned in a strong performance amid the surge by Amazon, with the Dow Jones U.S. Retail Index spiking by 4.0 percent to its best closing level in over a month.

Significant strength was also visible among airline stocks, as reflected by the 2.7 percent surge by the NYSE Arca Airline Index. The index bounced off its lowest closing level in well over two months.

Biotechnology, computer hardware and brokerage stocks also saw considerable strength on the day, while gold stocks moved notably lower amid a decrease by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index surged by 2.1 percent, while China’s Shanghai Composite Index slid by 0.8 percent and Hong Kong’s Hang Seng Index tumbled by 1.4 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index is down by 0.6 percent, the U.K.’s FTSE 100 Index is down by 0.5 percent and the French CAC 40 Index is down by 0.4 percent.

In the bond market, treasuries showed a lack of direction over the course of the session before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by less than a basis point to 4.101 percent.

Looking Ahead

With the ongoing shutdown likely delaying key U.S. economic data from the government, next week’s trading may be impacted by reaction to private reports on manufacturing and service sector activity and private sector employment.

Trading may also continue to drive by reaction to the latest earnings news, with a number of well known companies due to report their quarterly results next week.

NVDA Nov 19, Wednesday

AMD Nov 4, Tuesday

QCOM Nov 5, Wednesday

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OPTION CALENDAR:

I DON’T SEE THIS AS BULLISH EVEN INDEXES ARE AT NEW HIGHS.  FEAR CAN BEGET FEAR AND SELLING

 

 

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K9 CONVOY:

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THE JOE ROGAN INTERVIEW WITH BIG LAZAR – THOUGH SIX YEARS OLD WELL WORTH WATCHING. ABOUT AN HOUR

 

https://tinyurl.com/88wc7zvf

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MY CURRENT BOOK LIST:

THE CASE FOR ABOLISHING THE FED

G EDWARD GRIFFIN

https://www.youtube.com/watch?v=pqhxzN0PMeg

  

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WHO IS MARK LEIBOVIT?

MARK LEIBOVIT is Chief Market Strategist for LEIBOVIT VR NEWSLETTERS a/k/a VRTrader.Com. His technical expertise is in overall market timing and stock selection based upon his proprietary VOLUME REVERSAL (TM) methodology and Annual Forecast Model.

Mark’s extensive media television profile includes seven years as a consultant ‘Elf’ on “Louis Rukeyser’s Wall Street Week” television program, and over thirty years as a Market Monitor guest for PBS “The Nightly Business Report”. He also has appeared on Fox Business News, CNBC, BNN (Canada), and Bloomberg, and has been interviewed in Barrons, Business Week, Forbes and The Wall Street Journal and Michael Campbell’s MoneyTalks.

In the January 2, 2020 edition of TIMER DIGEST MAGAZINE, Mark Leibovit was ranked the #1 U.S. Stock Market Timer and was previously ranked #1 Intermediate U.S. Market Timer for the ten year period December, 1997 to 2007.

He was a ‘Market Maker’ on the Chicago Board Options Exchange and the Midwest Options Exchange and then went on to work in the Research department of two Chicago based brokerage firms. Mr. Leibovit now publishes a series of newsletters at www.LeibovitVRNewsletters.com. He became a member of the Market Technicians Association in 1982.

Mr. Leibovit’s specialty is Volume Analysis and his proprietary Leibovit Volume Reversal Indicator is well known for forecasting accurate signals of trend direction and reversals in the equity, metals and futures markets. He has historical experience recognizing, bull and bear markets and signaling alerts prior to market crashes. His indicator is currently available on the Metastock platform.

His comprehensive study on Volume Analysis, The Trader’s Book of Volume published by McGraw-Hill is a definitive guide to volume trading. It is now also published in Chinese. Mark has appeared in speaking engagements and seminars in the U.S. and Canada.

Yes, that’s a cartoon of me. Louis Rukeyser had us dressed up in ‘elf’ costumes on the screen broadcast each week. I’ve dated myself. That occurred for me between 1988-1996. Lou didn’t like any bearish comments, so myself and other elves got dumped in 1996.

I APPEARED AS A GUEST PANELIST WITH LOUIS RUKEYSER ONE MONTH BEFORE IN MID-SEPTEMBER 1987!

COME ON, DAD. IT’S TIME TO EAT

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