Tuesday, November 11, 2025

The 75% Earnings Beat Paradox: Why Companies Crushing Expectations Still Sell Off and How to Trade This Systematic Pattern

Wall Street Journal Research Exposes Market's Cruel Reality — Why Beating Earnings No Longer Guarantees Upside
 
   
     

The 75% Earnings Beat Paradox: Why Companies Crushing Expectations Still Sell Off and How to Trade This Systematic Pattern

Wall Street Journal Research Exposes Market's Cruel Reality — Why Beating Earnings No Longer Guarantees Upside

Here's something that'll make your head spin: I came across research from The Wall Street Journal showing that out of 439 companies in the S&P 500 (SPY) that announced earnings, about 75% of them crushed expectations. That should be fantastic news for anyone holding calls, right? Wrong. Every one of them basically sold off afterward.

This isn't just some academic observation — it's completely flipping the traditional earnings playbook on its head. When three-quarters of companies beat expectations yet still tank, we're dealing with a systematic pattern that's making directional earnings plays incredibly dangerous.


The Trader's Nightmare Pattern

I've been watching traders get absolutely crushed by this phenomenon. Take Blake’s experience this year: "I haven't done well on earnings this year. I think I won maybe one." And this guy knows what he's doing.

Here's how the cruel pattern plays out: Companies report at 7 PM or 7:30 PM, showing a 7% pump in pre-market or after-hours trading. You're thinking it's going to be sick, right? Then by market open, whether you're holding puts or calls, positions go the opposite way.

This is "buy the rumor, sell the news" taken to an extreme. The initial after-hours pump becomes a trap, and once regular trading begins, systematic selling pressure kicks in regardless of how good the earnings actually were.


Why Traditional Earnings Strategies Are Broken

What makes this particularly brutal is that even correct fundamental analysis doesn't translate to profitable trades anymore. You can nail the earnings beat prediction and still get destroyed because institutional money is using these announcements as exit opportunities rather than entry points.

The implications are massive: if 75% of companies beat expectations yet still sold off, then buying calls before earnings based on strong fundamentals has become essentially a coin flip with a systematic bias against you.

This explains why experienced traders are pivoting away from directional earnings bets toward volatility strategies that can profit from wild swings regardless of direction. When the market's this unpredictable around earnings, you need strategies that work whether stocks go up or down.

The lesson? Don't fight systematic patterns. When the market shows you that traditional logic doesn't apply, adapt your approach or risk getting run over by forces much larger than your individual trades.

To your prosperity,

The team at ProsperityPub

Follow along and join the conversation for real-time analysis, trade ideas, market insights and more!
Telegram: Alex: https://t.me/+GlX6JOJIgYI0MDQx
Telegram: Geof: https://t.me/+vDgn2p3NL7JhMDlh
Telegram: JD: http://t.me/jamie_dlugosch

Important Note: No one from the ProsperityPub team will ever contact you directly on Telegram. 

*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
 
 
I've been taking advantage of the market's true value cycle for daily shots at healthy payouts before noon!

And once you understand how this cycle works, knowing what, when, and how much to trade becomes a non-issue.

Take a look at this image:

 
 
 

Phase 1 happens at the closing bell when liquidity drops off and conventional trading ends for the day.

Phase 2 happens after hours when the market misaligns due to news, earnings/data releases, and typical overnight activity.

Phase 3 begins at the open when the market "wakes up" to realize what happened overnight and starts scrambling to realign itself.

This is exactly when I place my special opening bell trade to get in front of the market's aggressive move to restore balance.

And by the time the market realigns at Phase 4...

We should find a decent payout worth 25% to 50% sitting in our account if all goes according to plan.

Now I understand this is a lot to take in...

Which is why I went ahead to give you a full top-to-bottom rundown of this entire process right here.

You could start right now, and by the time you're done...

You'd know everything you need to take your first trade as soon as tomorrow morning.

Granted, I can't make absolute guarantees when it comes to trading...

But I can show you exactly what I've been doing with a handful of regular traders to target daily cash from the market.

If you'd like that...

Quickly head over here now to get started.

 
 
Join Me Today on the Profit Panel LIVE with Alex and Geof
To your prosperity,

The team at ProsperityPub

Follow along and join the conversation for real-time analysis, trade ideas, market insights and more!

 
Telegram: Alex: https://t.me/+GlX6JOJIgYI0MDQx
Telegram: JD: http://t.me/jamie_dlugosch
Telegram: Geof: https://t.me/+vDgn2p3NL7JhMDlh

Important Note: No one from the ProsperityPub team will ever contact you directly on Telegram. 

*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. 
   
 

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