Shares of Six Flags Entertainment dropped after a fatal incident on the Goliath roller coaster at their Georgia location. Investors responded to news of a death with the same decisive action they bring to all major decisions: panic selling based on a headline they skimmed while taking a sh*t.
The technical analysis remains unchanged. Support at $30. Resistance at $35. A person died on a ride named after a giant who got killed by a rock to the head. None of this information helps you predict tomorrow's closing price.
Retail traders immediately opened their brokerage apps to ask whether this was a buying opportunity. The answer is the same as it always is: you don't know what you're doing and neither does anyone else. A roller coaster failed. The stock fell. These events are connected only in the minds of people who think candlestick patterns are predictive.
Six Flags operates forty-two parks across North America. One incident at one park on one ride does not fundamentally alter the business model of charging families sixty dollars to wait in line for three minutes of screaming. But the chart moved down and to the right, so a thousand finance blogs will explain why this was obvious in retrospect.
The most bullish case for Six Flags is that people have short memories and even shorter attention spans. The most bearish case is that metal structures carrying humans at seventy miles per hour occasionally malfunction in ways that result in lawsuits. Both of these things were true yesterday. They're true today. They'll be true tomorrow when the stock is up two percent because someone on CNBC said the word "turnaround."
Day traders are already setting alerts for the next deadly amusement park accident so they can short the dip and lose money in a whole new way.
Photo by Frederick Wallace on Unsplash
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