The stock market moved up sharply to open Monday trading before selling pick up…
We’re not seeing any big warning signs to speak of from market internals.
The TRIN, or Short-Term Trading Index, has calmed down from its lower levels late this past week. Meanwhile, the TICK, which compares the number of stocks rising to the number falling on the New York Stock Exchange, is trending lower on the 15-minute chart, but we have yet to see extreme selling or buying.
But we are seeing a ton of headlines about energy prices as supply issues pushed oil above $81 per barrel over the weekend with a boatload of names in the sector trading higher.
This is a story that will continue to develop through the winter. Like I said this past Wednesday, traders looking to jump in should wait for flat or down days.
The week ahead also marks the start of my favorite season — earnings season — as several of the world’s major banks are set to report this week for the third quarter 2021.
But as much as I love to trade these events, I’m not a fan of playing bank earnings reports…
What You Need to Know About Bank Earnings Reports for Third Quarter 2021
Stocks usually make big moves about four times a year, and that’s typically around earnings.
Those big moves present a fantastic opportunity for traders of all sizes to capture monster gains in the stock market.
But bank earnings reports for third quarter 2021 — and basically most quarters — are by and large a different animal.
After all, we’re talking about institutions priced to perfection with armies of financial experts who say and do all of the right things.
Bank earnings reports look great on paper, but Mr. Market will have the third quarter already baked into the price.
So we’re not likely to see any surprises with big names like JPMorgan Chase & Co. (NYSE: JPM), Citigroup Inc. (NYSE: C) or Wells Fargo & Co. (NYSE: WFC).
Because of that, banks just don’t move a lot, even with earnings. It’s also why we haven’t seen much big institutional order flow into bank options so far.
That’s why when it comes to banks reporting earnings for third quarter 2021, I tend to use one of two strategies…
First, we can sell premium, which we’ve covered before — and I can’t say it enough, we never sell naked premium, because you never want to get caught with your pants down.
Check out the short video on bank earnings reports for third quarter 2021 below and I’ll explain why my second strategy is one of the hardest for traders to learn.
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With my Weekly Blitz Alerts, people can throw their old buy-and-hold strategy out the window. And forget spending hours reading through pages of earnings reports and squinting at stock charts.
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