Now that I got your attention,today's chart of the day is more of a what to stay away from chart of the day.

Stay Away Chart Of The Day

I have nothing to say except WOW, the coast is clear on Facebook (FB) so lets buy it right? I mean after all they did blow out the numbers here right? After all the stock did break into a new all time high right? Not so fast! 

In order to answer that question lets start with a chart of TSCO who also blew into a new high (on a news driven event of course).

Now lets take a look at FB here in a big picture sense.

Drilling down to an even shorter term time frame and frequency that shows the earnings pop action since reporting on both FB and TSCO what do we see?

Even if FB and TSCO don't roll over? They still need to digest these earnings pops by going sideways thru time. In other words I doubt we see much chart traction from here

So, what's my point to all of this? In the future when you see news about how awesome an earnings report is and how the stock gaps up big ( especially AFTER the markets have been running for a few months), stop in your tracks, take a breath and use the trend channels to guide you as to whether to take a trade or not on the reaction. As you've seen more often than not you are late to the party and buying the person who was willing to take the risk ahead of the reaction's stock knowing full well that the end result could be a big loss for them. No risk, no reward its really as simple as that.