What I find out about the market is not what the media is reporting but the movement of stock prices silently before the media reports anything. Case in point: Service Source International (SREV), the cloud company that I own 100 shares. After today's close in the market, third quarter earnings were being announced by SREV and nothing had been written as of this moment. After hours trading has the the stock up 15 cents from the close of $3.35.With less than 1 million shares being traded today, one would think not much will happen tomorrow. I will dispute that notion and, as the previous two quarters have shown, volume tomorrow will be over at least 4 million shares and we may even see SREV trade at the $4.00 level. All this can happen in the first half hour of trading at SREV's opening tomorrow.
Why? My guess is that the short covering by institutions in SREV and investors dumping this stock at the $3.00 to $4.00 level over the past three months has created quite a substantial inventory for those firms who are making a market in SREV. The only course of action and, the only reason many of these firms exist, is to start making some profits on the long side and start relinquishing these shares at a 25% higher price at the opening, maybe, and let the stock price guide the earnings information. I can almost guarantee that Zacks Investment Research and the Street.com will be reporting something tomorrow morning as to why SREV is substantially higher. In little more than 12 hours, investors in SREV will know and be a happier lot..
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