The other shoe just dropped…
Trading momentum for today and tomorrow is about to be off the charts.
I’m watching this setup.
The reason behind all of this volatility: 4 of the Magnificent 7 announced earnings last night, and a 5th announces tonight.
Plus, the Fed handed down its interest rate decision yesterday.
These are two of the biggest market-moving events of the quarter.
Major indexes consolidated earlier this week, waiting for these announcements. And today is our first opportunity to trade the volatility.
The waiting is over.
Patient traders, the ones who had their watchlists ready, are about to find out why preparation is so important. They’re ready to bank.
The post-catalyst window is one of my favorite times to trade because the market finally shows its hand, and if you know how to read it, you know exactly where the opportunity is.
The setups I’m watching this week.
My Trading Angles
The numbers are out…
But I’m not chasing the overnight moves straight out of the open.
The initial spike or dump is almost always a head fake. When the real money shows up at the open, we get the real answers.
How these stocks trade in the first 30 minutes tells me everything I need to know about whether there’s a trade worth taking today.
I’m watching two things on the stocks that reported earnings:
- Stocks that beat and are holding support.
- Stocks that sold off but landed at a level worth respecting.
Either setup can give us a clean trade.
I’m also keeping my eyes on sympathy plays: names in the same sector that move in lockstep with the big reporters, without carrying the same headline risk.
Sometimes the cleanest trade isn’t the stock that reported. It’s the one next to it.
And finally, I’m also watching major indexes.
When 4 of the Mag 7 report on the same night, they drag the entire index with them.
The S&P 500 and the Nasdaq are essentially weighted bets on these names. So if the earnings reactions are broadly positive, the indexes reflect that. If the market decides to sell the news, the indexes show you that too. And often without the single-stock landmines.
Trading SPY or QQQ options right now gives you exposure to the post-earnings momentum without having to be right about any one company’s reaction.
One stock can gap the wrong way and wreck your trade. Trading an index smooths that out.
Interested in trading the larger market move?
Be good (and be good to others),
Ben Sturgill
*Past performance does not indicate future results. Not typical.
