Webinar Overview - Dr Alexander Elder Talks Q3 Earnings Season

In October, famous trader Dr. Alexander Elder gave another fascinating webinar session with insights into Q3 earnings season.

Dr. Elder’s life story is one of rags to riches. At the beginning of his career, he arrived in New York with just $18 in his pocket, he told traders during the webinar. Since then, Dr. Elder has accomplished a great deal. He is the author of a bestselling book, The New Trading for a Living, and lives in New Hampshire.

After becoming interested in trading, Dr. Elder read every book he could find on the stock market and eventually began to figure out what he was doing. His own book is about the things he wished he’d known before he started trading.

“It took me a long time to learn how to trade. It’s a big mistake to think that trading is easy.” Dr. Alexander Elder.

So, how does he approach full time trading as a professional? Read on to learn how he reaches his trading decisions.

Look at multiple timeframes

Dr. Elder believes traders should monitor multiple timeframes, not just one, and the timeframes should be one level up or down from the other. For example, if using a daily chart, add a weekly chart for comparison’s sake. The smaller timeframe shows more details while the higher timeframe shows the bigger picture. Dr. Elder adds 2 moving averages, one fast and one slow, to identify areas of value.

By using this approach, Dr. Elder became aware of the bear market in the S&P500 in December 2021.

Earnings season

Dr. Elder is wary of earnings season because it can trigger hysterical selling or buying and distort stock prices. He discussed the example of Netflix which rallied after a better-than-expected Q3 earnings report after improving its advertising revenues. The stock gapped up from 235 to 275 USD.

“I don’t expect such rallies to continue. Excitement took the price up...it will test the gap.” Dr. Elder.

Intuitive Surgical is another stock that rose quickly after its latest earnings report. Overnight, it rose by 10 percent because speculators jumped on the good news. The hysteria doesn’t last, and Dr. Elder looks for the counter-hysterical move.

Federal Reserve decisions

A longer-term trend in the US stock markets was triggered by the Federal Reserve’s interest rate hikes. Since the Fed is determined to reduce inflation to 2 percent, the cost of money is higher than a year ago. Dr. Elder believes we’re not finished with the bear market yet because inflation must drop much faster before it meets the Fed’s target.

The aggressive interest rate hikes in the US weren’t matched by the European Central Bank, which was slower to start tightening monetary policy. For this reason, the EUR is in a bear market. Banks and hedge funds in Europe put their money in US accounts because they receive higher interest rates compared to European banks, said Dr. Elder. On the other hand, when the EUR is low against the US Dollar, it makes tourism and products more competitive.

Planning trades

Dr. Elder spends a lot of time observing the market conditions before placing trades. If he sees an interesting trend, he prints out the chart and pins it on his bulletin board. In this way, he remembers which trends are interesting and makes sure to watch the developments every day until the decision is made.

To watch the full session, follow the link to Admirals Youtube channel.  

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.