Earnings Season Sparks Market Excitement
With chop and uncertainty still swirling in the market, overall trading has responded positively to recent corporate earnings reports.
Simpler’s traders follow these quarterly releases while seeking trade opportunities. Already this week, many reports are showing positive results, especially in the technology sector. Combine this with recent all-time highs in the S&P 500 and traders are looking for rally options.
Even with enthusiastic reports and upward movement this week, market uncertainty hasn’t subsided. Simpler’s traders work to apply solid trading psychology and methods when setting up trades in this “curb your enthusiasm” market.
Supply chain issues such as cargo ships stuck outside ports, high fuel costs, and fewer truckers, are fueling inflation-related shortages on retail store shelves. This hits home in consumers’ pocketbooks which then affects those technology profits. Add in a broader view, such as the banking sector struggling with inflation, and traders are still seeking a defined market direction.
This market has continued to push higher, even with harsh influences such as 4 million people leaving their jobs behind, continued pandemic issues, and foreign influences continually producing uncertainty in the economy.
Simpler’s traders are using caution in this minefield of economics and markets.
The goal, as always, is to find solid trades that don’t result in deep losses. Technicals aren’t revealing a clear picture in terms of volume for an uptrend. Planning good trade exits now – provided the indicators show sell signals – and looking ahead for shorts in the market will help Simpler’s traders stay nimble.
Strategies that utilize calendars, diagonals, and fades can provide setups to navigate these choppy market conditions.
Over the next two weeks key technology companies will release reports. Traders are anticipating strong reports from FAANG companies – Facebook, Amazon, Apple, Netflix, Alphabet (formerly known as Google) – along with a host of others in the tech sector. (Netflix reported on Tuesday.)
The opportunities may be there for the taking – as long as traders continue to adhere to proven strategies.