Staying Alert, Focused Into Earnings Season

2021-04-08

The overall market seemed to rise from its choppy slumber of late to push higher heading into the weekend.

The Nasdaq stirred the market by jumping to 13,829.31 points for a 1.03 % rise. The Dow closed at 35,503.57 points for a slight gain (adding 57.31 points on the day) and the S&P 500 was awake with a .42% increase to 4,097.17 points.

Higher moves were welcomed by traders looking for a change from the extended market consolidation and sideways chop.

Looking at the broader representation of the market, Simpler’s traders have seen the market react this way before. The market is at 3 ATR from the mean which is begging for a pause — such as a small pullback — then a move higher into earnings season. Barring any bad news, traders are expected to buy that dip as the market rises.

After sideways chop the past two months, traders are looking to take advantage of upward movement. The caution at this point is being wary of a significant pullback caused by an unseen influence. 

Simpler’s traders are avoiding jumping into an earnings run late at an expensive point (it’s based on individual tickers) and taking on too much risk. Trading a long position into earnings requires tightening up stops and staying on top of trades.

Upward momentum has produced some energy in the market — and among traders — which could lead to higher potential trades.

We want to be bright-eyed and ready to go with what the market presents during earnings season.

We Saw: Broader market stirring higher — 

  • S&P moving higher to another record
  • Fed not expecting “persistent inflation”
  • Weekly jobless claims higher for the week

We’re Watching: If market upward momentum holds —

  • Low-risk, best practice earnings run strategies
  • Timing of plays as price rises into earnings
  • Setups in: UPWK, CAT, YETI, GOOGL