Gaming earnings is never the "best trade", as I re-iterate that now and again. Very very rarely will I speculate of an earnings reaction. I much prefer to watch the reaction, THEN jump on board and forgo the initial portion of the move to in turn obtain the ability to watch it's hand tip first. Sometimes even that is difficult too. Ex: something just did not "feel right" yesterday to me with GS, even tho I wanted to short at 150, and had planned to if it could not get over it... I think it was b/c i felt EVERYONE in the world was watching that ezact same set up right there. Plus they way they closed it at 150.00 right on the button, just seemed "strange", felt like a trap. It just didn't feel right, so I didn't enter it. I'm now in hingsight glad I had that feeling, b/c I had strongly contemplated entering heavily short at 149.50.
I don't normally like to trade earnings, and the only earnings report that I have ever given an opinion on w/ rationale on this blog was TM back last qtr. http://erikmarketview.blogspot.com/2009/05/toyota-motors-early-entry-to-one-of.html
I do have a strong opinion SBUX is going to have a terrible report. I feel they have a terribly flawed business model.
Estimate EPS for Tuesday is .19. They have not earned that much since the 1st qtr 2008.
Why is it that high?....sure there are many factors beyond what the eye can see, so that's not something worth over-analyzing or breaking down. However the "momentum" of the broad market is one of the factors. Remember, when the market goes up=Analysts raise the bar. When the market goes down=Analysts lower the bar. Analysts are chasers and pumpers. (that does not mean they are always wrong or always right...they are just almost always kinda late to the party)
GS can make money in any market. INTC has tons of foreign exposure and they even said that China was the best part of its earnings. Yea SBUX has a couple franchises overseas, but its backbone is almost entirely the U.S. consumer. (which I feel is a very bad thing here, and if people think that everyone is going to report like GS and INTC, they they are out to lunch)
This is just my opinion, and yea it's a strong one.
I think Starbucks is dead money, and that without a timeline: