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You shorted a stock because the chart looked stretched. 

Every indicator confirmed your thesis.

Then you watched it rip another 10% higher while your account bled out.

This happens because Wall Street never taught you the critical distinction: Overbought is a condition, not a sell signal. 

Stocks can stay overbought for weeks while shorts get carried out on stretchers.

The traders who survive earnings season understand something you do not. 

They wait for overbought AND overpriced to align before pulling the trigger. 

Without both conditions, you are the only seller in a room full of algorithmic buyers.

Today, I’m breaking down two earnings reports that prove this point. General Motors jumped $7 on their beat. Boeing dropped $8 on theirs. Same outcome. Opposite reactions.

The Genesis Cog Scanner identifies exactly when valuation and momentum align to create high-probability setups.

But What About General Motors?

Look at the actual numbers.

GM reported and took a massive write-down on their EV business. Even with that hit, they put up monster earnings.

Add the four quarters together. GM made roughly $12 per share.

Divide $12 into $87. You get a multiple of seven.

Seven times earnings is not expensive for an automaker. That is why the stock ran higher despite being technically overbought.

The lesson is simple. Do not be lazy. Do not trust what you see on the trade page.

Why Boeing Got Crushed

Boeing BA beat by a wide margin. Cash flow came in strong. The stock still dropped $8.

Here is what happened:

• The stock ran $80 into earnings
• Expectations were fully priced in before the report
• There was nowhere left to go but down
• The beat only softened the decline

I told my team that anyone holding Boeing through that print would be fired. The gain was there. The exit was obvious.

Boeing is a buy. Just not at this price.

Wait for it to consolidate around $210. Let the algorithms finish their work. Then step in.

The Rule You Keep Breaking

You cannot short a stock just because the chart is overextended.

I see traders do this every single day. They look at a parabolic move and assume it has to come down. They short and watch their accounts bleed.

Here is the truth. You short when two conditions exist together:

• The chart is overbought
• The valuation is overpriced

GM was overbought on the chart. But at seven times earnings, it was not overpriced. That is why shorting it would have destroyed you.

The algorithms do not care about your bearish thesis. They see a stock trading at a reasonable multiple and they buy the dip. You become the only seller in the room.

What This Means For Your Portfolio

Stop making knee-jerk trades based on stretched charts.

Before you short anything, ask two questions. Is it overbought? Is it overpriced? You need both answers to be yes.

Delta Airlines proved this. United proved this. People sold at low multiples because they panicked. They did no research. The stocks ripped higher and left them behind.

The Genesis COG System marries momentum and valuation together. We identify when both conditions align. That is when you get aggressive.

Overbought alone means nothing. Overpriced alone means nothing. Together they create opportunity.

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