Earnings has started by whipping many short positions as financial stocks posted encouraging results and guidance.
This time last week there was palpable nervousness even though our pre-earnings filters had financials as bullish.
Ultimately, each trader has to determine how aggressive they want to be and when. What I know for sure, is that the best of the best can dial it up and down accordingly. It’s like blackjack. You dial it up when the count is with you and the house is losing, and you dial it down when the house is winning and you don’t have the count with you.
With some notable exceptions it hasn’t been quite as easy during the past few months, but that’s completely normal.
You simply exercise patience because the easy streaks always come again, and you have to be ready because things can change literally in a few days.
For example a stock (or even a linked group of stocks) can burst through a Key Level, display perfect Big Money Footprints and consolidate all in a four-day window. That’s how fast things can change. Add in a post-earnings environment and benign market timing conditions and you have an excellent window.
And guess what … We’re now IN earnings, which means Post-Earnings will follow, and that’s our best time of all.
In the last few weeks I’ve said that Oil & Gas (particularly midstreams) and Financials looked good, and that’s exactly what’s manifested.
It just so happens that others have also joined the part, and this second week of earnings announcements will be intriguing, with the market anticipating a positive positive outcome.
As always though, “Trade What You See”. Anticipate sure, but don’t pull the trigger until a proper setup happens and starts to break out (unless you’re doing my Pre-Earnings strategy and can handle the higher risk profile of that particular tactic).
Market Timing:
The Medium Term Timer is no longer oversold, and the main indices pulled away from the waterfall pattern that was in evidence.
The Long-Term Timer (OVIsi) is still yellow.
Market Outlook:
Last week I showed stocks going in both directions. This week there is a bias to the upside.
Stock Selection:
Now earnings is upon us, we have a number of choices. Trade stocks that don’t have earnings. Trade stocks post-earnings. Or … trade pre-earnings.
Today I have examples of ALL THREE! Yes, even the pre-earnings setups as a few are looking pretty good!
Application:
No change from last week.
The likes of MGM and LVS were solid trades from solid setups using my Fast Filters. If you didn’t see them, take a look at my last week’s Review.
Focusing on setups near Key Levels takes just a couple of minutes with my pre-prepared Fast Filters.
Work has resumed on the Short Term Market Timer, so fingers crossed on that one.
Software Upgrades
The big upgrades of charts/watchlists/stock profile page / journal and TradeFinders above are only a few weeks away, and will be released in time for the WiseTraders Summit, for event attendees.
The new OptionEasy Strategy Analyzer is up, running and released, with more to follow shortly. At the end of today’s Review I give a quick demo, and I’ll be holding two MasterClasses for Miami attendees in early November.
The old Analyzer is still available if you want to use that in the meantime.
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Remember, you can play the video at 1.25x or 1.5x speed to whizz through it faster if you like! I have placed all the stocks covered in today’s review in your “Latest Preview” watch list.
