US Steel (X): Ahead Of Earnings

(Click on charts to enlarge, then click on them again for further enlargement. Use left arrow to return to narrative).

Given the incredibly rapid advances in technology, it wouldn't surprise me if one day after I've croaked off (or even before), someone invents a technical analysis program that does all of the work for us to help us make our trading decisions. If someone does, please tell them that it was Melf Elf's idea, and have them send my share of the profits to:

MelfElf@heaven.com/roomwithaview

The program would go something like this:

Trading Buddy: Good morning, Melf Elf, you little stinker! You still are holding your shares of US Steel that you bought for 44.80 on 11-2-10 when the Falling Wedge broke out, despite the fact the it was suggested that it might be a good idea to take profits when the Symmetrical Triangle target of 56.34 got MADE on 12-15-10.

Melf Elf: Do you HAVE TO say that every morning?! Who needs a judgmental Trading Buddy, anyway? Curses!

Trading Buddy: See? You ARE a little stinker, aren't you?

Today, 4-8-11, US Steel is at the neckline of the H&S Top pattern that I have explained to you. Do you require a review of that pattern?

Melf Elf: No, Creep Face! You've been harping on it every morning for the past month. It still hasn't broken down, has it?

Trading Buddy: No, it hasn't. Would you like to SELL, or continue to HOLD.

Melf Elf: If it hasn't broken down on a CLOSING basis and you haven't suggested selling it yet, I'm not selling! Why can't you tell me if it's going to break down, or not?

Trading Buddy: I do not know the future, nor do I ever TELL YOU what to do. You must make your own decisions, based on the information that I give you.

Melf Elf: CREEP FACE!

Fast forward to the 4-18-11 close...



Trading Buddy: Good Morning, Melf Elf!

Melf Elf: Oh, you again :(

Trading Buddy: US Steel remains below the neckline of the broken H&S Top, where I suggested on 4-9-11 that it might be a good idea if you sell the CLOSE below the neckline. Would you like to SELL, or HOLD today?

Melf Elf: Well, geez, I'm not selling now-w-w. Didn't you say that it at least would return to the broken neckline?

Trading Buddy: REVIEW: After a technical breakout or breakdown, stocks often retest them, but not always.

Melf Elf: TELL ME! Is it going back to that neckline?

Trading Buddy: I cannot predict the future.

Melf Elf: I'm holding, CREEP FACE!!!

Fast forward to the 4-22-11 close...




Trading Buddy: Good morning, Melf Elf!

Melf Elf: Hey, you were right! It did return to the neckline. Nice going!

Trading Buddy: I didn't tell you that. Would you like a review of what I said?

Melf Elf: No. I know what you said. You're evil. I think you really knew that it would return to the neckline, but you just wouldn't tell me that.

Trading Buddy: I do not know the future.

Melf Elf: Yeah, yeah. Right.

Trading Buddy: REVIEW: On 4-19-11, US Steel returned to the neckline of the broken H&S Top. On 4-20-11, the stock gapped back above the neckline, but closed below by three cents: the neckline was at 52.78; the close was 52.75. On 4-22-11, US Steel closed back below the neckline...

Melf Elf: ... Was that a "Gap and Crap" above the neckline that you enjoy talking about so much because you get a chance to say "crap?"

Trading Buddy: Uh-huh.

Melf Elf: See? You're evil.

Trading Buddy: US Steel is slated to report earnings on 4-26-11. Would you like to SELL, or continue to HOLD?

Melf Elf: Tell me again what you said about earnings?

Trading Buddy: That's a "wild card." ANYTHING can happen at earnings, or at the release of any news about a stock.

Melf Elf: Like?

Trading Buddy: If the earnings are well-received by the market, US Steel could go back above the neckline, or even gap above the 57.55 high of the Right Shoulder, if they knock it out of the park with earnings.

Melf Elf: Which would mean?

Trading Buddy: A close back above the neckline would negate the bearishness of the broken H&S Top, as of that candlestick.

Melf Elf: What would that say about the future for US Steel if it can get back above the neckline?

Trading Buddy: I can't predict the future.

Melf Elf: What good are you, CREEP FACE?

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A program like this would need a lot of work, but we can get the general idea of it. Just about anything we read about the stock market involves PREDICTIONS. Questions from shareholders are about wanting someone to PREDICT what's going to happen next with any given stock. Some predictions will be right. Some won't be.

This is why I always say that I try to FOLLOW the market, as best I can, and I don't even think about "being right," or "being wrong," as though either were some state of "being."

I don't have the least clue what will happen with US Steel when earnings are released. Like "Trading Buddy," I can't predict the future. What I can do, though, is look at this chart heading into earnings, and if I were a shareholder (I have no position in US Steel), make the best money management decision that I can.

Personally, based on how badly positioned US Steel is heading into earnings, I'd have to TAKE THE MONEY and sell it. That isn't advice, or a recommendation. I don't advise or make recommendations.