🚨 I’ll be live at with Alex at 9:30 a.m. ET🚨
We are tracking a massive software breakout that could signal exactly where AI is headed next. Plus, we’re breaking down the key morning options setups you need on your radar to capture the momentum early [tap to join us for Profit Panel]
I want to show you something that drives me nuts about how most traders read their screens.
Pull up any quote screen and you’ll see a change column — the number everyone looks at to see if a stock is up or down. But here’s the problem: That change column shows the move from yesterday’s close.
And I can’t go back to yesterday and trade.
That’s why I built a different column into my software — the net open column, which shows the change from today’s open. It’s the only way to see what’s actually happening right now.
How Earnings Gaps Fool Everyone
Let me walk you through a simple example that shows how misleading the usual numbers can be, especially during earnings season when gaps are everywhere.
Say Alphabet (GOOGL) closes at $300. Earnings hit after the bell and they’re fantastic. The next morning the stock gaps up and opens at $350 — a clean $50 jump. That alone is enough to get every commentator foaming at the mouth.
But suppose the stock gets sold off hard and slides all the way down to $315 during the session. The change column will still show it up $15 because it’s measuring against yesterday’s close. Meanwhile, the stock has dropped $35 from the open.
And here’s the part most people never bother to think about. If you bought at the open expecting follow-through, you’re down $3,500 on 100 shares. But if you held it from the prior day, you’re still up $1,500. Same stock, same day, completely different realities depending on how you got in.
The Best of Both Worlds for the News
This is where the narrative game kicks in.
The financial news loves this setup because they get to pick whichever story sounds better. They can talk about “great earnings” and “the stock being up $15 on the day” without ever acknowledging the $35 drop from the open. It keeps the headline clean and the story positive, even when the intraday action tells a very different tale.
Meanwhile, the traders who shorted the selloff made real money, and anyone who bought the gap has a hole to dig out of — but none of that shows up in the tidy change column.
That’s why I don’t trust it. I want to know what the market is doing now, not how today compares to a close I can’t trade anymore. The net open column gives you that clarity, and unless you’ve programmed it yourself, you probably don’t have it.
It’s a small edge, but on days with big gaps and fast moves, it can completely change how you read price action.
Geof Smith
Geof Smith TradingÂ
Follow along and join the conversation for real-time analysis, trade ideas, market insights and more!
- Telegram: https://t.me/+lm8_Nq3Su104NmFh
- YouTube: https://www.youtube.com/@FinancialWars
Important Note: No one from the ProsperityPub team or Geof Smith Trading will ever contact you directly on Telegram.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Wall Street’s Dirtiest Secret Yet…
I recently began sharing a secret report with my tight circle of buddies about hidden orders from Wall Street that send stocks higher within days…
Disclaimer: The trades expressed today are based on signals from the Sleeper Cell Scanner with the benefit of 20/20 hindsight unless otherwise stated. According to a backtest of 64 years of data dating back to 1962, the signals pulled by the scanner would have been 81.9% accurate on over 7,300 trade signals… No strategy is perfect, and wins are not guaranteed. There are bound to be winners and losers along the way. Since the Sleeper Cell Scanner is a tool for traders and not a trading service, profits and performance will vary among users.
