What’s On Tap for Traders: May 8-12

Welcome to your weekly trading preview! We added a Table of Contents to help you jump around: Table of Contents This Week’s Trading CalendarThe Week in Review…It’s Inflation Time!Earnings Season Slows Down But It’s Not OverSo How Has Earnings Season Been?Traders Are in a Rotten MoodA Look at Sector Performance in 2023:Factoid of the WeekGet to Know Sami Abusaad This Week’s Trading CalendarClick the calendar image to enlarge it, then scroll down to see what’s coming down the pipe the week of May 8: The Week in Review…What a week! We survived:Big earnings from Apple (AAPL), AMD (AMD), Starbucks (SBUX), Shopify (SHOP), and Qualcomm (QCOM)The FOMC and ECB Rate DecisionsThe Nonfarm Payrolls ReportThe regional bank collapseAnd with Apple leading a big Friday surge, our big 4 horsemen ETFs recovered some of the midweek damage, with the QQQ’s even getting in the green for the week:Year-to-date, the QQQ’s are still crushing the other big ETFs thanks to huge moves in names like Apple, Nvidia (NVDA), and Microsoft (MSFT).  The QQQ’s also have no exposure to banks or energy, which have underperformed. So it’s been smooth sailing in 2023:Now let’s look forward to next week. By the way, Scott Redler is hosting a free week in the Alpha Team VTF®, and he can walk you through all the events we’ll talk about.  It’s Inflation Time!We’re walking into a big week for inflation… and it’s worldwide thing. Yes, the US has CPI on Wednesday and PPI on Thursday. Traders will be looking for evidence inflation is breaking down to support expectations that the Fed will pause after this past week’s 25 bps rate hike. The CME FedWatch Tool implies a 96.1% probability that the Fed does not hike at the June 14 Feed meeting. FedWatch also shows the market is pricing in a 38.1% chance of a 25 bps cut in July. We’ll see if the CPI/PPI numbers sway these expectations. And overseas, we get:Wednesday: Germany CPI, China CPI & PPIThursday: New Zealand Inflation ExpectationsFriday: France, Spain, Brazil, and Russia CPIEngland in particular has a busy economic calendar next week with:Monday: Retail SalesTuesday: House Price IndexThursday: Bank of England Rate Decision & Meeting Minutes, Industrial ProductionFriday: GDP, Manufacturing Production Earnings Season Slows Down But It’s Not Over85% of the S&P 500 have reported earnings (more on this below), but we’ve still got some notable reports hitting the tape this week. Several consumer names report, including PayPal (PYPL) on Monday, AirBnB (ABNB) and UnderArmour (UAA) Tuesday, and Disney (DIS) on Wednesday. Even with high inflation, The consumer seems to have unlimited money for things they desire (like iPhones and McDonald’s fries), so it will be interesting to see if these companies show strength or strain. AirBnB and Disney will also give us reads into travel demand. Electric vehicle enthusiasts will be watching Lucid Group (LCID) on Monday and Rivian Automotive (RIVN) on Tuesday. Tesla (TSLA) got slapped on earnings in April because of margin pressure, and Ford (F) is losing buckets of money in its EV business. We’ll find out if Lucid and Rivian do any better. And don’t forget about Carl Icahn! His company Icahn Enterprises LP (IEP) moved its report to Wednesday, May 10. IEP got smashed this week after Hindeburg Researched accused Icahn of accounting irregularities.  Look at this rollercoaster of a chart — we’re all eager to see how this one turns out: So How Has Earnings Season Been?According to FactSet… not bad — at least relative to expecations. 85% of S&P 500 companies have reported, and so far:79% of companies beat EPS estimates75% of companies have beaten sales estimates.Earnings have declined by -2.2% vs. expectations for a -6.7% declineNobody’s celebrating a -2.2% decline in earnings but it’s not as bad as -6.7%. Remember, the market’s about expectations, and expectations were too low coming into earnings season. Speaking of low expectations… Traders Are in a Rotten MoodInvestors and traders remain remarkably bearish despite the market’s stability. According to AAII, just 24.1% of investors are bullish. That’s well below the 37.5% long-term average. Plus, AAII said “bullish sentiment is unusually low for the 50th time out of the past 70 weeks,” and “bearish sentiment is still above its historical average of 31.0% for the 71st time out of the past 76 weeks.” This is despite the SPY’s 7.8% gain in 2023 and the QQQ’s 21.2% rally. Now let’s dig below the surface to see what’s been working this year: A Look at Sector Performance in 2023:2023’s been a bizarre year. It’s almost like we’re risk on and risk off at the same time. On the risk on side: Housing (ITB) is leading the market despite a slowdown in housing, Tech (XLK, SMH) is booming and ARKK rebounded from a messy 2022. And on risk off,  gold (GLD) is outperforming and Treasuries (TLT) are up. Who could have imagined both ARKK and gold outperforming? Factoid of the Week According to Bespoke Investment Group, nonfarm payrolls have exceeded economists’ estimates for 13 straight months.This chart is bonkers. Non Farm Payrolls has now exceeded expectations for a record 13 straight months. https://t.co/UaURbFdG6a pic.twitter.com/4urENerxmy— Bespoke (@bespokeinvest) May 5, 2023 Maybe we should stop trusting economists’ long-term predictions?  After all, they can’t predict anything even one month out… Get to Know Sami AbusaadHow did Sami achieve greatness as a trader? Find out here:

What’s On Tap for Traders: May 1 – 5

What a week! We had: Big earnings beats like Microsoft (MSFT) and Meta (META) Whiffs like Amazon (AMZN) and Snap (SNAP) First Republic (FRC) melting down A slowdown in US GDP Here’s your trading calendar before we dig into one of the busiest weeks of 2023: (click to enlarge) First, let’s start with a quick review of the recent action: Tech Dominates… For Now Stocks finished slightly higher for the month as buyers overlooked Amazon’s (AMZN) post-earnings decline, the US GDP miss, and the First Republic (FRC) implosion. Related: How Jeff Cooper Nailed Amazon at $122 And in an impressive turnaround from a weak start, the SPY finished right at the highs of the day: Year-to-date, QQQ’s is decimating the other major index ETFs thanks to the tech stock boom. Of course, next week is huge for tech investors thanks to these earnings reports: AMD (AMD) on Tuesday Qualcomm (QCOM) on Wednesday Apple (AAPL) on Thursday Apple always demands major attention from investors, and the stakes are high thanks to the stock’s 29%+ gain this year: David Prince  tells us “Slowing iPhone demand could be offset by the services business picking up steam, but the upside potential looks muted from here.” If you’re interested in trading Apple pre and post-earnings, check out Inner Circle because David and his team will be tracking the stock closely next week. AMD and Qualcomm should also be on your radar because we’ll get insights into where we are in the semiconductor cycle. And of course, it will be fun to see how many times they say ‘AI’ on their conference calls. Can they top Google, Microsoft, and META, each of whom said ‘AI’ nearly 50 times? Other Earnings Reports of Interest The fun does not end with tech. Starbucks (SBUX) reports Tuesday. The stock hit a 1-year high this week in the wake of strong numbers from McDonald’s (MCD) and Pepsi (PEP): So we’ll see if the struggling consumer still has cash for those fabulous orange mocha frappucinos: Crypto exchange Coinbase (COIN) reports Thursday. Bitcoin has been one of the best-performing risk assets this year, so we’ll see if that’s driving results for Coinbase, which has been down in the dumps thanks to regulatory threats: And on Friday, meme stock giant AMC Entertainment (AMC) drops its earnings numbers. We also have: Monday: Stryker (SYK), Vertex Pharmaceuticals (VRTX) Tuesday: Uber (UBER), Illinois Tool Works (ITW), Eaton (ETN) Wednesday: CVS (CVS), Estee Lauder (EL), Progressive (PGR) Thursday: ConocoPhillips (COP), Booking Holdings (BKNG), Shopify (SHOP), Square (SQ), Doordash (DASH) Friday: Cigna (CI) Okay, that’s enough earnings talk because… The Fed Is Dead Ahead We’ve got a critical week ahead on the US economic front. The Fed will announce its latest rate decision on Wednesday. T3 Live Chief Strategic Officer Scott Redler said “There’s a 90% chance they go 25 bps, and most think that’s end of the rate hike cycle. This could be an inflection point for this cycle. Many people think the Fed will cut in the second half, but I don’t see that happening unless we go to SPX 3700 or lower. If we hold above 4100 and start squeezing towards resistance at 4300, the Fed isn’t cutting.” IMPORTANT: Scott is hosting a Fed Day trading event in the Alpha Team VTF® on Fed Day. You can sign up right here. Scott’s Positions as of 2023-04-28 at 3.39.56 PM  Click to enlarge On top of the Fed, we’ve got plenty of employment data coming including: Tuesday: JOLTs Job Openings Thursday: Initial Jobless Claims Friday: Nonfarm Payrolls We also have some key international reports, including: Tuesday: Australia Rate decision, Eurozone CPI Wednesday: China Manufacturing PMI Thursday: ECB Rate Decision Friday: Canada Employment How do Traders Feel? BEARISH Do traders hate this market? Yes. Hedge funds have the largest net short position in S&P 500 futures since 2011: Just as large speculators/hedge funds have built largest net short position for S&P 500 futures since 2011 (blue), leveraged investors have also boosted net short positions on 10y U.S. Treasury futures (orange) to record pic.twitter.com/zfcqdrHO57 — Liz Ann Sonders (@LizAnnSonders) April 25, 2023 And the American Association of Individual Investors says just 24.1% of investors are bullish, well below the long-term average of 37.5%: “Optimism is unusually low for the 49th time out of the past 69 weeks,” AAII says. Get to Know Kira Turner  Rodeo is more dangerous than NFL football. And rodeo is where Inner Circle’s Kira Turner learned risk management. Learn more about her story in this episode of the Madam Trader podcast: We’ll see you bright and early Monday morning! Good luck out there!

What’s On Tap for Traders: April 24-29

We’re coming off an exciting week of trading with disappointing earnings from Netflix (NFLX) and Tesla (TSLA) and upside surpises from the banks. Now let’s look at what’s ahead this week. Click this image for a full calendar: (click to enlarge) Tech Earnings Season Rages On Tech has been remarkably strong in 2023 and QQQ is still crushing SPY by more than 2:1: As of Friday at 1:34 p.m. ET And that’s after earnings-driven declines in Tesla (TSLA), Netflix (NFLX), and the semiconductors this week. But we’re just getting started. We’re coming up on a pivotal week with plenty of big tech earnings reports including Tuesday: Microsoft (MSFT), Google (GOOGL) Wednesday: Meta Platforms (META), eBay (EBAY), Texas Instruments (TXN) Thursday: Amazon (AMZN), Intel (INTC) AI has been the #1 buzzword on the Street, which has close eyes on Microsoft and Google for opposing reasons. Investors want to know how far Microsoft is ahead, and how far Google is behind. Meanwhile, Meta has a lot to prove with the stock up over 75% this year. And Amazon is in close focus as a barometer for the consumer. On Friday, JP Morgan reiterated its stance that Amazon is the best internet play right now, so we’ll see how things pan out Thursday. David Prince of T3 Live’s Inner Circle rode up Amazon this week so follow him for more insights on the stock: $AMZN Has been a wonderful ride. I trimmed much of my position today given my 108s are up huge. We have 3-4 big cap reports b4 their print and might very well buy $AMZN on any pullbacks pre thur night. — The Inner Circle Trading Group DP David Prince (@epictrades1) April 21, 2023 A Big Regional Bank Report While bank earnings are mostly behind us, there’s still a biggie to watch Monday morning – even though it’s a regional name. Of course we’re talking about First Republic Bank (FRC), which is 90% off its February highs thanks to the regional bank crisis: This week, Charles Schwab (SCHW) — also caught up in the decline — bounced hard after its Monday morning earnings report: Traders will be eager to see if FRC is going the way of Schwab… or Signature Bank. Energy Earnings Energy has lagged in 2023 after crushing strength in 2021 and 2022, as you can see in this chart going back to January 2021: Exxon (XOM) and Chevron (CVX) report earnings on Friday, which will show us the strength of the industry. Even More Earnings… On top of those, we’ll get plenty of reads on the economy from the likes of: Monday: Coca-Cola (KO) Tuesday: Visa (V), Pepsi (PEP), McDonald’s (MCD), Danaher (DHR), UPS (UPS) Wednesday: Boeing (BA), T-Mobile (TMO) Thursday: Mastercard (MA), Honeywell (HON), Caterpillar (CAT) A Light US Economic Calendar We had few important US economic data points last week, but things get busier this week with: Tuesday: S&P Home Prices, Consumer Confidence, New Home Sales Wednesday: Durable Goods, Trade Balance, Retail Inventories Thursday: GDP, Pending Home Sales Friday: PCE Price Index, Personal Spending, Michigan Sentiment The PCE Price Index is a biggie because it’s one of the Fed’s prime inflationary indicators and could thus impact monetary policy. Overseas Action Speaking of inflation, Germany, France, Spain, Australia, and Singapore will reports CPI numbers this week, giving us a better read on global inflation trends. Germany, France, Spain, and Canada also report their Q1 GDP figures. Sentiment Is as Confusing as Ever The AAII Sentiment Survey shows that just 27.2% of investors are bullish, well below-the long-term average of 37.5%. That’s flat from last week: According to AAII, “bullish sentiment remains below its historical average of 37.5% for the 71st time out of the past 73 weeks.” Pretty bearish… right? Yes. But CNN’s Fear & Greed Index shows that traders are greedy: Permabulls always say everyone’s bearish. Permabears always say everyone’s bullish. The truth is somewhere in the middle… Video of the Week: Scott Redler on the Pro Trading Lifestyle Scott Redler of T3 Live’s Alpha Team VTF® talks to Greta Wall about his life in trading: Go here to sign up for Greta’s next event with T3 Trading’s Derrick Oldensmith. Sami Abusaad’s Gap Trading Webinar Want to learn Sami Abusaad’s gap trading secrets? Go here.

What’s On Tap for Traders: April 17-21

We’re coming off an exciting week of trading with a cool CPI report, a more cautious Fed, and some upside earnings surprises from the banks. Now let’s look at what’s ahead this coming week. Click this image for a quick look at what’s on the calendar: (click to enlarge) Tech Earnings Season Begins With Netflix and Tesla Tech is outperforming big time in 2023, with the QQQ’s up 18.6% vs. a 7.3% gain for SPY: As of Friday at 1:30 p.m. ET But the scales may tip with Netflix (NFLX) reporting earnings on Tuesday. T3 Live Chief Strategic Officer Scott Redler notes “It’s hard to be long or short Netflix into earnings given how far it’s come. It’s been a real leader over the last quarter, so it will give traders a good gauge on tech stock sentiment.” Tesla (TSLA) follows on Wednesday. Dan Darrow of T3 Live’s Alpha Team VTF® tells us “Tesla’s earnings will be must-see TV. April deliveries were disappointing relative to high expectations, and it will take a strong report and guidance to break the stock out of its 2-month trading range.” FYI: Dan will join Greta Wall for a LinkedIn Q&A this Wednesday. Click here to sign up! Given Elon Musk’s chronic inability to stay out of the news, the world will be watching this show. Semiconductor investors will want to keep an eye on ASML Holding (ASML) and Lam Research (LRCX) on Wednesday plus Taiwan Semi (TSM) on Thursday. The VanEck Semiconductor ETF (SMH) is up a whopping 22.9% YTD to top our ETF leaderboard: Click to enlarge As of Friday at 1:30 p.m. ET Micron (MU) rallied after a horrible quarter, so we’ll see if the “it can’t get any worse” semi rally extends into Q2. Positions Disclosure: Scott Redler and Dan Darrow’s positions as of 2023-04-14 at 1.26.32 PM (Click to enlarge) Even More Bank Earnings: Schwab in Focus Bank earnings were on the strong side Friday, with JP Morgan (JPM) surging higher: We’ll get even more this coming week. Schwab (SCHW) is a big one to watch on Monday. We all know Schwab as a major broker and asset manager, but the company’s bond market losses got it caught up in the regional bank meltdown, and the stock’s been a mess: Traders and investors are eager to see the impact on Schwab’s financials. The options market is pricing in a ~9% move in SCHW next week. Given the uncertainty, we could see such a move. Other bank reports to watch: Monday: State Street (STT) Tuesday: Bank of America (BAC) and Goldman Sachs (GS) Wednesday: Morgan Stanley (MS) and US Bancorp (USB) Thursday: American Express (AXP) A Light US Economic Calendar The US economic calendar lightens up a bit this week. We’ll have Building Permits on Tuesday followed by the Philly Fed and Existing Homes Sales numbers on Thursday. Traders will be looking for more signs of a slowdown to get a better read on the Fed and monetary policy. Overseas Is Busier The global calendar has a lot more happening, especially on the inflation front. We have CPI readings on Tuesday (Canada) and Wednesday (England, Eurozone, New Zealand). Inflation seems to be cooling worldwide so we’ll see if the trend continues. Plus, China reports GDP and Industrial Production numbers late Monday. And on Friday, we’ll get England and Canada’s Retail Sales numbers. Sentiment Is Still… Confusing: The AAII Sentiment Survey shows that just 26.1% of investors are bullish, well below-the long-term average of 37.5%. That’s down from 33.3% last week: According to AAII, “bullish sentiment remains below its historical average of 37.5% for the 71st time out of the past 73 weeks.” Pretty bearish… right? Yes. But CNN’s Fear & Greed Index shows that traders are greedy: Permabulls always say everyone’s bearish. Permabears always say everyone’s bullish. The truth is somewhere in the middle… Video of the Week David Prince of Inner Circle talks to Jesse Martin, winner of two World Series of Poker Gold Bracelets and the 2019 $2 Million DraftKings Fantasy Football World Championship. Jesse is an IC member and shares how high-stakes poker trained him to succeed in the markets. Momentum Mastery Is Coming… JR Romero, Head of T3’s Newsbeat Program, is teaching his all-new Momentum Mastery Course LIVE. Want in? Contact Amber Buchetto for details. What did you think of this article? Let us know in the comments!

VIX Explosion Confirmed: Here’s What’s Next

On November 29, Jeff Cooper said the VIX would explode, and it did: And just yesterday, Jeff initiated a position in IWM December $162 puts. He just locked in a 29% gain on half the position — in 1 day! He also went long TZA which is up 5%. Click here to get his next trade! ******************** My December 3 date hit and the market broke (1 day early). I have been looking for a turn in the markets in early December because of 3 factors,. 1) 180 days/degrees from the Dec 3, 2018 pivot was the big June 3, 2019 low. That low (2729) perpetuated a 425 point jagged march to last Wednesday’s all-time high. Another 180 days/degrees from the June 3 low is December 3. 2) At the same time last in last Wednesday’s report we wrote: “The SPX struck a magic Gann level yesterday. This is 56 squared, which is 3136. Allow me to explain. You see, W.D. Gann was the first to recognize that panics often begin from around the 56th day from an important high or low. Two of the biggest examples are the 1929 crash which occurred around 56 days from high. Ditto the 1987 crash. The same has been true of blow-off tops culminating around 56 days from a pivot low.A good example is the final run into the October 11, 2007 top that started from an August 16 pivot low.” We went on to give several other examples. 3) Additionally, we flagged the remarkable synchronicity last Wednesday was the 56th calendar day from the October 3, 2019 low. In league with this time and price synergy, a VIX Volatility Explosion signal was on the table and we did a video walking through the setup. On Monday, the Volatility Index, the VIX, surged 21% intraday. On a closing basis. it was the largest single day percentage rise in over three months. Breadth closed with 788 advancers on the NYSE versus 2122 decliners. Monday morning’s report showed the setup of what can happen when an item, in this case the DJIA, is stretched above its 200 day moving average. One thing we know about price is that it is mean reverting. On Monday, that mean reversion hit with authority. Growth glamours hit an air pocket. My 4 Horsemen stumbled: MDB tanked 11 COUP shed 5 points OKTA sank 8 TTD plunged 36 points A daily SPX below shows the nasty Trap Door setup: 1) A high tick close on Wednesday 2) Up open overnight on the futes despite Trump signing bill in support of Hong Kong protestors 3) Small green on Monday’s open 4) Plug gets pulled to start the new month So where can the SPX go? While the DJIA closed below its 20 day moving average on Monday, signaling the minimum potential for a 1000 point/one month decline, the SPX tested its 20 day yesterday. That 3107 level where the 20 day resides is set to be snapped on a gap this morning. 90 degrees down from the 3154 high is 3098. 180 degrees down is 3042 — near the 50 day m.a. 270 degrees down is 2987 — near a 50% retrace of the rally. 360 degrees down is 2933 — near the 200 day m.a. With 2993 being 90 degrees square the October 3 low, the implication is that the path of least resistance is toward the 2933 to 3000 region, as long as we get sustained follow through below the 20 day moving average. Green arrow is October 3. Purple arrow is 993 for 2993 (in the outer rung) Notice the square out with the end of the year where the upthrust occurred in 2018. Just when the vast majority of market participants were convinced of a continued run up into year end, it looks like Mr. Market staged an ambush. Just when it looked like a mirror image of the decline from October 3, 2018 indicated an advance through year end, and that a repeat of 2018’s Christmas Massacre was off the table, unrealized gains are vulnerable. Yesterday is a good example of air pockets resulting from profit taking when buyers have their wallets on their hip on the first day down. Conclusion. Even in a bullish pullback, a 180 degree correction can play out. This is the 3042 region, which ties to the breakout point. Even in a bull market, the normal expectation is for the breakout point to be backtested. However, breakage below 3140ish suggests a larger top is in. Moreover, the action we are seeing this week is indicative that the back of the runaway move is broken, regardless of whether the recent runaway train turns into a sleigh ride from hell or not. Position in IWM puts, UVXY, UVXY calls

74% of Surveyed Traders Bullish on NVDA in Our Latest Mystery Chart Challenge.

==> Sponsored by the T3 Live Black Room – Click to Join Our FREE Open House Yesterday, we held our second Mystery Chart Challenge, which is our version of a classic blind taste test. It’s your job to analyze the chart without the influence of knowing the ticker. Here’s the chart we showed: And as you can see in the title of this article, it’s Nvidia (NVDA):   Only 2 respondents guessed it right, and a third was awfully close in guessing Advanced Micro Devices (AMD). And how do surveyed traders* feel about Nvidia, based on the blank chart alone? *this is NOT some kind of scientific sample and we can’t promise any statistical significance, so please take these numbers with a very large grain of salt Very positive, as it turns out. 73.7% said they were bullish based on the chart along. 15.8% said they were bearish. And 10.5% were in the middle! Stay tuned for our next Mystery Chart Challenge! To ensure you get notice to participate next time, sign up for our free newsletter here.

Mystery Chart #2: Are You Bullish or Bearish?

==> Sponsored by the T3 Live Black Room – Click to Join Our FREE Open House It’s been far too long since we’ve issued a mystery chart challenge! This is our version of a classic blind taste test. Here’s how it works: We’re giving you a 6-month daily chart with 10/20/50/200 day moving averages, and no name. It’s your job to analyze the chart without the influence of knowing the ticker. Last time, 179 people participated… and a lot of them were angry to find out they were bullish on the gold miners (GDX). Here’s the latest mystery chart for you to analyze: Are you bullish or bearish? Enter your vote below, and guess the ticker if you dare. Make sure you hit the submit button so we can log your entry. Tomorrow, we’ll reveal which chart this is, and post the results. Good luck! Loading…

7 Ways to Get Destroyed on Your First Options Trade

T3 Live’s Mystery Chart #1 Revealed!

Yesterday, we played a little game. We posted this mystery chart, and asked traders whether they were bullish or bearish on it, and to guess the ticker: Before we reveal the answer, let’s see whether traders were bullish or bearish on this particular ticker: 52.7% were bullish, 30.4% were bearish, and 16.9% were in the middle. And the ticker is… GDX! 7 people guessed it right in our survey (and even more did on Twitter). A few other traders were close, guessing other gold instruments like GLD and NUGT. So what do you think? Should we do this again next week? Let us know in the comments!

Are You Bullish or Bearish on This Mystery Chart?

UPDATE!: We revealed the mystery chart here. Hi all! We’re doing a little experiment here. Here is a year-to-date daily chart of a mystery stock. Are you bullish or bearish on it? Scroll down to cast your vote, and guess the ticker! (only 3 people have it right so far…) Loading…