• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

This Market Defies Logic, but Fear Still Shouldn't Drive Trades

Worries of Amazon made for some wild moves, but the sellers were proved wrong.
By JAMES "REV SHARK" DEPORRE
Feb 03, 2022 | 05:01 PM EST
Stocks quotes in this article: FB, QQQ, AMZN, MSOS

The market was stunned by a very poor earnings report from Meta Platforms (FB) . The poor response to the report dragged down the entire market on terrible breadth of 1,360 advancers to 6,900 decliners. The Nasdaq 100 ETF (QQQ) was hit particularly hard with a loss of 4%. A big part of that was driven by Amazon (AMZN) , which lost 8% in the regular session.

Market players were very fearful that Amazon would confirm the gloomy report from Facebook and sell it all day.

The sellers were proved wrong. Amazon put up a good report and issued upbeat guidance, and the stock is now up 16% after hours. Instead of an 8% loss, the stock is now sitting on an 8% gain.

There really isn't any way to logically trade this action. What makes it much harder is that the volatility in these big-cap names causes sympathy moves in thousands of other stocks that are traded in big baskets by computer algorithms and ETFs. There really was no reason for a cannabis exchange-traded fund like AdvisorShares Pure US Cannabis ETF  (MSOS) to trade down Thursday, thanks to Meta, and there is no real reason for it to bounce on earnings from Amazon, but that is what is happening.

The good news is that the gloom and despair that was so thick during the day's session has lifted for now, and we may see more focus on some stock picking, as market players reflect on some of the wildly random action we had Thursday.

This is an extremely difficult market, but the emotions and lack of rationality will create some mispricing and good opportunities.

Have a good evening. I'll see you tomorrow.

(AMZN is a holding in the Action Alerts PLUS member club. Want to be alerted before AAP buys or sells stocks? Learn more now.)

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, DePorre had no position in any security mentioned.

TAGS: Investing | Stocks

More from Stocks

Ford's Decline Is Decelerating

Bruce Kamich
Jul 5, 2022 12:31 PM EDT

Watch this key price level when things could shift.

Progressive's Commercials Are Well Known, But What About Its Charts?

Bruce Kamich
Jul 5, 2022 11:54 AM EDT

Traders could probe the long side of PGR.

Is Tesla Spinning Its Wheels?

Ed Ponsi
Jul 5, 2022 11:30 AM EDT

In addition to company-specific issues, Tesla is also fighting a tough macro environment.

An Encouraging Development in a 'Terrible' Stock Market

James "Rev Shark" DePorre
Jul 5, 2022 11:20 AM EDT

There's a bright spot, but it needs to be sustained.

Valuation and Market Sentiment Face Off Against the Charts

Guy Ortmann
Jul 5, 2022 10:45 AM EDT

Let's check the latest index charts and market data.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:01 PM EDT PAUL PRICE

    A Recent Director Buy in Children's Place (PLCE)

    Four of the most recent insider trades in PLCE hav...
  • 07:34 AM EDT PAUL PRICE

    A $525,000 Vote of Confidence on Macerich (MAC)

  • 09:49 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Stop Wishing, Hoping, and Praying and Take Control...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login