Everyone Out Of The POOL

This is the chart of POOL when earnings were released last week, and these are a couple of comments from internet posters, a week before the earnings release:

July 15, 2009 - Internet post:

"If you guys want a tip of your lifetime then sell POOL asap. My dad came in crying last week saying he lost his job with them. They are in VERY big trouble financially. Sorry to say but in the next month this is going to drop close to $10 bucks or less. REMEMBER THIS POST."

July 16, 2009 - Internet post:

"This stock will see a major sell off within the next 10days. No one wants to be holding the bag when 2qtr numbers are released and if you do not understand the dynamics that are involved and the importance of these numbers you should not be in the pool. Leave it to people that know the industry."

The response to earnings was a breakout of the Bullish Inverse H&S pattern on the heaviest volume in a year. Apparently, not only did "no one want to be holding the bag when 2qtr numbers are released," market participants also...

...were heavily short the stock ahead of earnings, which accounts for much of the heavy volume. Shorts were dead in the water (pun intended) on the "Take No Prisoners" BIG Breakway Gap up in POOL after earnings were released. The gap up opening was "just for openers," and the stock continued higher into the close. UGH.

Market Lesson:

REMEMBER THIS POST? Definitely remember it, and try not to get locked into an opinion about the market's fundamentals (or technicals, for that matter)like this person did. Yes, the year over year loss in POOL doubled, but it's the market's reaction to earnings that matters, not the earnings.