Are you scratching your head yet? If you take a look at other data points in the press release, you'll note that Goodyear's operations seem to be improving. Cash and liquidity is doing okay. Savings from efficiency initiatives are helping out. No, I'm not saying everything is golden, but I do appreciate the fact that Goodyear reported a profit instead of a loss.

Unfortunately, the problem is on the outlook for the fourth quarter. According to Bloomberg, Goodyear should record an operating loss in North America during the period. The market did not like this news whatsoever. But was a 20% cut in share price warranted?

Perhaps. Not so much from a fundamental viewpoint, but from the perspective of Goodyear's performance this year. Let's think about this. The stock has bounced off its 52-week low very strongly. The Dow recently reached 10,000, but the index pulled back from the psychological number almost before the celebrations were over. Does it feel like a correction is on the horizon? If you said yes, then you might understand the theoretical reasoning behind the sell-off. Combine a disappointing outlook with a market that's already made a move, and you've got a great environment not only for profit-taking, but for panic selling as well.

That's my guess as to why shares of Goodyear were so unpopular yesterday. I think, however, that the selling was overdone (to be clear, I'm not saying the stock shouldn't have suffered, I'm just saying 20% down may have been too severe). I expect the stock to recover, but here's a caveat: never buy a 20% sell-off unless you fully understand the situation. Also, do a lot of due diligence, wait for the stock to settle, and study the price action over a few sessions. After all, the market might be trying to tell you something. Even though I believe Goodyear's stock will come back sooner rather than later, Wall Street has spoken out against me. You have to consider both what the institutions are saying and the potential for analyst downgrades after a trading event such as this.

Disclosure: I don't own any company mentioned; positions can change without notice.