300 Plus down day. Closed: CGNX, SPWR

I had noted for some time that the market was appearing to roll over. My break out trades did not get much traction.  Today they all fell apart and the major averages were down big today.  300 on the Dow.  The S&P looked like this.   

That caused a few stops to get hit, CGNX SPWR

CGNX, was my "they had great earnings" I think I should buy it play...:   In AH $44.85  Out 41.57 - 3.28.   This trade failed on all counts, theory, entry and exit as I let my  42 stop slide.   The only positive is that I traded it small as it was a test trade for me.

SPWR had set up nicely but it couldn't handle the selling.  ... and good thing for me because my stop get hit.  Sold at 37.47.  They then missed earnings and traded as low as 32 AH.

Entry. 38.51  Exit. 37.47.  - 1.04.   .57R.   
What can I say?  I traded planned my trade and traded my plan. It didn't work.  I had opportunities to get out with small profits but the set up was still decent.   My mistake was initiating the trade with 3 days to earnings which constricted the movement to the upside.    Live to fight another day.

Opened: CGNX. Let's see what this earning gap stuff is all about.

CGNX put up monster earnings in my opinion and moved up 20% A.H.

Here's where it's coming from:

I bought @ 44.85 as it looked like it was going higher.  Its after hours high went over 47. This is a test trade for me as I want to put the post earnings continuation trade in my playbook.  The trouble of course is how do you know whether a particular move will be a break away gap or whether it will fade?

Unless I have real money on the line I don't think I can analyze my theory.  So I bought 100 shares, which is small enough that If the gap fills it won't damage my R.  It closed AH trading at  44.
I'll use 42 as the stop.


I've bet this CGNX will be a continuation move rather than a pop and drop.
Here's the S.A. type summary.

Cognex +23% AH on Q2 beat, strong guidance

• • Cognex (NASDAQ:CGNX) expects Q3 revenue of $165M-$170M, well above a $142M consensus. A major customer is expected to account for over $60M of the total.
  • While all three of Cognex's market segments contributed to its strong Q2 performance, the company states factory automation helped the most, with European demand picking up following a weak 2013. Both factory automation and surface inspection set new revenue records, and chip/electronics capital equipment grew Q/Q and Y/Y.
  • Gross margin was 76% vs. 77% in Q1 and 76% a year ago; GM is expected to slip to "the mid-70% range" in Q3.
  • R&D spend +15% Y/Y to $13.6M, SG&A spend +16% to $38.7M. $13M was spent on buybacks.
  • Opex is expected to rise 25% Q/Q in Q3 due to "further investments in growth areas," some of which won't be repeating in Q4. Q4 opex is only expected to be 10% above Q2 levels
• The only potential negative I've seen is that margins guidance have been reduced and are seen dropping to the "mid 70s"    CGNX has the highest gross margins and second highest operational margins in the sector.  The 10Q stated that it was due to higher additional sales staff and other personnel expenses.