We should consider ourselves blessed to have had no inkling of the very strong earnings reported by this company yesterday.  For had we even suspected that Q2 profits had doubled on a 30% surge in revenues, we’d surely have been tempted to load up on out-of-the-money calls.  But take a look at how Wall Street treated the news. The rally in the opening minutes turned out to be a bull trap — a sleazy but all-too-common maneuver by the stock’s handlers to take advantage of the many very bullish investors who would have placed orders at the opening to buy-at-the-market.  Anyone who did so got sandbagged by the subsequent $5 drop in the share price.  Buy the rumor, sell the news, as the saying goes.

Since the trade-desk sleazeballs often, though not invariably, get it right, we should view yesterday’s selloff as having been knowledgeable in a way that individual investors are not. The implication is that the former are wary of next quarter’s earnings being impacted by the slowdown in emerging markets. Begging to differ, we’d say Goldman shares still look like a good bet to hit 180.36 — a 12.5% run-up from the current price of 160.24.  We expect the correction to continue for at least the next few days, but if and when GS becomes an opportune buy again, perhaps within the next 4-6 days, we’ll do our best to warn you in timely fashion. If you want to be alerted via email in real time, click here for a free trial subscription. (Note: We still hold some bull call spreads that are all but certain to expire worthless on Friday. Since we paid nothing for them, they are of no concern.)