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Jim Cramer weighs in on three things for investors to watch before a company reports earnings, which will be tellers for whether or not the company will fall short of earnings expectations when they report.
Here's what Cramer had to say.
"Okay, well first what you want to do is has it been in a tremendous downturn? And therefore it's going to be viewed as negative no matter what. So that's really important. That's the United Health issue and boom, it just keeps, keeps going down. If it spikes ahead that means you're going to be screwed no matter what, unless there's inside information of which there's almost none now cause you could do go to jail," said Cramer. "The old days, a spike ahead meant that quarter was going to be really good and if the stock is down three or four, that gives some leeway for an analyst to say, you know what? This is your opportunity. I'm going to raise my price target so you would love three or four. If Apple can do religious conversion of making people believe in the service revenue stream, then you'll get that hook, but it's a religious conversion...I don't want it to be like the inquisition. I'd like it to be more voluntary."
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