Earnings in Focus
This week is all about earnings! Check out my watchlist for top tickers to watch.
This quarter, earnings are not expected to be good. We are looking at a potential earnings recession this quarter, where we may see two quarters in a row of slowing EPS growth. This is absolutely true. But, the great thing about that is that this is fully anticipated. And what the stock market doesn’t like is surprises! So, if stock market participants expect earnings to be bad, and they are bad, it’s not usually a big deal, and we don’t typically see a major negative reaction. I would only expect a major bearish reaction if earnings are much worse than anticipated. While I’m sure we will see slowing, I am not anticipating massive downside surprises, which is good for the stock market.
In fact, when anticipating bad news, and the news is what we expect, or in fact, surprisingly better than the negative news we anticipated, it’s very positive for the stock market, and the stock market can rally.
Just look at JPMorgan (JPM). The banks have had bad news surrounding them for weeks, and when JPM beat estimates, it gapped up 4.8% and kept going. This, first of all, is a great sign of what is to come. Second of all, it means we don’t have to worry about the biggest of the banks.
This week, the primary tickers I am watching/trading are:
Out of all of these, Netflix and Tesla are the most critical, and will have the most impact on a continued Nasdaq rally (or fade). Afterall, the Nasdaq is testing resistance and has multi-timeframe squeezes lined up. It’s like a wood pile, full of kindling and lint, and all it needs is a match.
Want to join me to trade it live? I’ll be in the Options Gold room this week from 1-2pm CT, where you can join for free! Check out the link below.