Stephen Eubanks on Financials Earnings: Need the E to Justify the P

Some choice quotes from our weekly discussion with Stephen Eubanks, principal and founder of Eubiquity Capital and MrTopStep. Tune in to the audio for the whole conversation.

"You wonder if expectations have been raised - in terms of meeting estimates and whisper numbers - that it could be a 'buy the anticipation of earnings and sell the news.'"

"You've had a nice run [in financials]. Now you need the E to justify the P."

"When you have both [stocks and bonds] going, then you start to see guys that have macro trades on that are starting to go against them."

"A lot of guys have had this long-oil/short-natural gas pair on. It's been one of the best pair trades in a decade. Natural gas this week has had 5 percent intraday swings and was on an eight-year low today. Boone Pickens has got to be standing upside down on his head."

"You're talking moves that some sectors have had that are yearly returns."

"You're going to be subjected to pre-market and post-market earnings for the next two weeks. You could be dead right on the call, but other people are going to get excited about a name. Or, you could be dead right on your call about being excited about the market and be disappointed with earnings."

"When your grandmother is calling you and asking you what's going on in the euro, you know [the short trade] is crowded. It's what everyone is talking about."

"Downgrades - getting out the bad news - can be setups for rallies."

"Everyone who anticipated a January effect to happen have been compensated handsomely in terms of returns so far."

"You have to sit back and see what plays out because if we go from a fear of being in the market to a fear of not being in, and we start that too early, then there's going to be disappointment all over the place."

"I just read some headline on an advertisement while I was traveling. It said, 'Stock markets are like anniversaries: timing is everything, and if you miss it, you're in trouble.'"

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