Best Buy beat estimates. Raised guidance. Stock dropped.
This is technical analysis in its purest form. The fundamentals worked. The company did everything right. Earnings topped expectations. Management hiked the full-year outlook because the first half crushed it. Then the chart said f*ck you anyway.
Retail traders spent the morning trying to understand why good news equals red candles. They pulled up YouTube tutorials. They refreshed their brokerage apps. They texted their cousins who work in finance but actually just sell insurance. None of it helped. The line went down.
Here's what happened. Nothing happened. The stock was already up before earnings. People bought the rumor. Then they sold the news. Then they sold more news. Then they panic-sold the panic. This is not a mystery. This is not a riddle wrapped in an enigma. This is just what stocks do when everyone already knows the thing that just got announced.
Best Buy could have reported that they cured cancer using HDMI cables and the stock still would have gapped down. Why? Because the chart decided it was time to gap down. The chart does not care about your outlook hike. The chart does not read earnings releases. The chart is a visual record of people clicking buttons, and on Thursday, more people clicked the red button.
Some guy named Derek bought calls at 9:31 a.m. because he saw the headline and thought he was early. He was not early. He was late, wrong, and holding worthless contracts by lunch. Derek will spend the weekend telling his friends that the market is rigged. The market is not rigged. Derek is just bad at this.
Best Buy sells electronics to people who still think Geek Squad is a reasonable expense, and even they can't win when the tape says no.
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