Market Shifts in Earnings Season

THE WEEK

The first week of the Earnings Season was rough.  The Market was down hard all week while most of the reports were actually good.  The actual EPS (earnings per share) was above or equal to what the financial analysts’ predictions were.  So why the hard down?  Here is my thinking.  The Market had been on a steady climb up since mid-November of last year.  It was one of the best climbs I had witness since the woes of COVID.  Every week was a new 52-week high.  The Market went over the 5000 mark for the first time at the beginning of February. Then the upward momentum started a slowdown. Traders had begin taking profits off the table. 

Next we got the government economic reports indicating that inflation was not slowing down as fast as it had been.  My guess is there will not be an interest rate cut by FOMC in May as originally anticipated.  They are holding a tough line at 2% per annum inflation and feel if they ease off, Inflation will just rear its ugly head once more.

The third factor I see is Earnings Announcement season is here and traders are selling their positions because they don’t want any surprises in their portfolios.  The accumulation of the Market is now at an E – the lowest measurement on a scale of A to E.  My first solid clue of a hard down coming was on Wednesday, the 10^th when I noted the 52-week lows doubled without any significant price drop.  That told me the Market was weakening.

LOOKING AHEAD

This will be a heavy earnings announcements next week with a ponderance of technology companies reporting.  I believe trading will be a little smoother and we will see some money flow bock into the Market.

HOW AM I DOING?

Just a so-so week.  I didn’t find any long term positions to trade.  The bright star of my trading was a new trade one of group in the Quantum Trading Group has developed.  He named the trade ICE MAN.  ICE for Iron Condors at Earnings.

This Week’s Deep Dive for the Webinar on Thursday

A Review of Government Economic Reports

Before COVID these reports hardly made a dent in the trend of the Market.  COVID and inflation changed all that.  The FOMC relies on the data from certain reports to make their decisions.  And those decisions are causing trading chaos.