Markets opened flat Wednesday as strong earnings reports continue. Analysts expect the S&P 500 to have an earnings growth rate of 30% for the third quarter. This number is already priced into the market, so stocks could react if this number fluctuates — and more in Wednesday’s stock market recap.
Interest rate pressures aren’t having as big of an impact on stocks as investors initially thought. Large caps are starting to outperform small caps due to positive earnings. So I’ve picked out one long trade to ride the bullish move, and one weak stock to short as we approach the end of the year.
Stock Market Recap
In Wednesday’s stock market recap, stocks opened flat and then edged higher.
Keep your eye on existing home sales, the Philadelphia Federal Reserve Manufacturing Index and jobless claims on Thursday. Earnings are pushing stocks higher but inflation, jobs and supply chain issues could affect the bullish move we’re currently experiencing.
Volatility levels and the put/call ratio are neutral. The S&P 500 SPDR (NYSEArca: SPY) and the Dow Industrials SPDR (NYSEArca: DIA), which track the corresponding indexes, are finally in bullish mode. They now have more than two complete days trading above their 50-day moving averages. The Invesco QQQ Trust Series 1 (Nasdaq: QQQ) will look to establish its second day above its 50-day MA Wednesday.
Roger’s Radar: 1 Long, 1 Short Stock to Trade This Market
Apple Inc. (Nasdaq: AAPL) has been one of the best stocks in the past decade. The stock has nine points to the upside and five points to the downside. If one stock can go up again in this market, it’s definitely AAPL. I’m not a huge fan of the stock, but I like it right now.
The short play is on a multinational clothing company. The stock is looking weak and cotton prices are going higher. The company manufactures overseas and is likely experiencing many supply chain issues.
Check out the video below to see what this underwear and sock company is and what the options are for this name and AAPL.
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