Earnings are clearly propping up the markets at this point.
Just a quick glance at the chart will show you that $ES_F was heading downwards pretty aggressively until the first red line; the first big E.R. reports of the season. $NKE and $MU crushed their reports, and the markets responded upwards…but not on weak volume.
[check out the chart in better detail over on tradingview here.]
The second red-line shows another save of $SPY … aided by beats by $RHT and $PAYX.
Rinse and repeat for a while…then the final line is on April 6th, when the first big bank earnings came out.
What Is Going On With The Markets?
Well… I don’t know. Anyone who claims to know with precision is probably guessing and pulling their claims out of their asses.
Here’s what I see…
Option flow is pointing towards a choppy week here, we may easily end up on Friday where we started at close on Monday.
The same options flow is pointing towards upside after this weekly options expiration coming Friday ( April 13th, 2018).
The options flow I’ve been seeing is implicative of downside towards the end of the week.
A member of my trading room asked me about my thoughts on the potential for a breakout in gold and the implications on markets.
I told him about avoiding biases…our 1 on 1 conversation went a little something like this…..
That was my quick answer…at least in terms of the short-term potential for a spike in gold as markets get shaky here.
Here’s a bit more of an elaboration…
Ahh..these markets eh?
For some of the newer traders reading this, this may very well be the first time you’ve experienced moderate volatility.
Yes. I said moderate.
As you can see, volatility after 2009 (well o8 technically, aka Q.E.) has been pretty tightly based around $10.00.
So yes, quite moderate. Yet, while we’ve broken some of the 2000 levels… (think tech bubble)…this time it’s different.
Yeah. most people say that it’s never different…boom-bust…boom-bust…and continued. My fundamental response is, yes, that’s how markets work. Boom-bust. But allow me to introduce a quick clip from a great movie (Margin Call) to speak for me and you in that respect.
Bullish Start To The Week, But What’s Next?
It’s been a bumpy two weeks for the indices. A few days have seen massive dips and recoveries. One saw a 300+ move in the dow in the matter of a few hours.
A fair amount of newer traders haven’t traded high volatility market situations like this.
It panics them. It makes them overtrade as they try to recoup losses…usually resulting in more losses.
If the above applies to you, calm down and slow down your trading a bit…
Take a step back sometimes. Think of it like this…if you had bought 1 share of $QQQ on February 1st and done nothing with it, you’d be breakeven as of today. If you had bought one on February 5th as the market seemed to be recovering and held through the dip, you’d be up a fair amount.
So my last “stocks to watch” post turned out to have a 100% winning rate. Had you taken on any of the positions listed there, you would have profited (to various extents and %s of course).
While that may be the only time that ever happens, I just felt like bragging a little bit. 10/10 on weekly stock pick performance is..well…pretty good.
But regardless, don’t consider all of the trades listed below to be profitable necessarily; some will, some won’t. That’s just how it is.
What this list is meant to be, is a list of stocks for you to consider adding to your watchlist. Nothing more and nothing less. With that said, here are some of the tickers that’ll be on my watchlist.
This is a new type of post that I will try to make each week (usually weekends, but sometimes during the week) where I share some stocks to watch, or at least that I’ll be watching based on recent Unusual Options Activity as well as some other market factors.
For full disclosure, I will let you know which ones I have positions in already. The names on this list that I don’t have positions in are names that I’ll be eyeing for opening positions in.