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Fasten Your Seat Belt: 3 of the FAAMGs Reporting Today

Just a heads up for those not aware, 3 of the 5 FAAMG stocks (i.e.- the leading stocks that have been doing most of the heavy lifting in the Nasdaq 100 in recent months) are scheduled to report earnings after the close today. Amazon (AMZN), Alphabet (GOOG/GOOGL) and Microsoft (MSFT) will be report after the bell which all but assures some volatility in the after-hours trading session today as well as a likely gap at the open in one direction or the other. As such, risk adverse traders might consider reducing or hedging their exposure to the market. One other consideration might be to temporarily suspend or widen stops on any positions that are trading close to those stops until any post- AMZN/GOOG/MSFT noise has subsided during the regular trading session tomorrow.  Daily charts with some key technical levels for each below:

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Apr 27, 2017 3:46pm|Categories: Equity Market Analysis|Tags: , , |8 Comments

8 Comments

  1. Dontknowanything April 27, 2017 3:50 pm at 3:50 pm

    Are you fading this move in the NQ Randy?

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    • rsotc April 27, 2017 3:55 pm at 3:55 pm

      Not that it should affect anyone else’s decision but I just bought some near-month (May) QQQ puts as a bearish bet on how the market trades following the earnings & guidance on these big 3 leading stocks. I almost expect a pop in the AH & into tomorow’s early session but who knows. I did leave enough to add if that happens & I’ll also add that these are just pure (naked long) puts, not a paired trade with limited downside. In doing so, I just bought (or will buy if I add tomorrow) the same amount that I’d be willing to lose if stopped out on a QQQ short trade. In other words, these puts will either expire worthless on May 19th or I will sell them for a profit before then.

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      • rsotc April 27, 2017 3:59 pm at 3:59 pm

        I didn’t go with NQ because although you can use stops, in a fast moving market (e-mini trading session), a stop-limit order can be passed right through without executing. As such, I can’t be guaranteed to limit my loss to a specific quantity in NQ, again, if there is a very sharp move after any of these companies report whereas in the puts, the most I can lose is what I paid for them.

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    • Dontknowanything April 27, 2017 4:23 pm at 4:23 pm

      Everyone of those except Apple obviously who is yet to come out in a week and MSFT didnt beat.. ATH

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  2. rsotc April 27, 2017 4:25 pm at 4:25 pm

    I should have also mentioned INTC as reporting after the bell today as that is the 800 lb. gorilla of the chip sector. INTC trading down about 3% now after reporting but I’ve long ago learned not to try and read anything into the initial pop or drop from a company in the pre-market or after-hours sessions immediately following the release of their quarterly earnings. Most companies will follow-up with a conference call to future discuss the numbers as well as provide forward guidance. As such, the initial reaction, pop or drop, can very often prove to be fleeting with the stock going on to move in the opposite direction in the following regular trading session or subsequent sessions going forward. Bottom line, let the dust settle into & over the weekend before reading too much into how the market reacts to these 5 leading tech (plus AMZN) companies. We also have AAPL on deck for Tuesday so the market should have had time to digest all of the reports & guidance from these leading companies by the end of next week. Until then, the markets could be choppy.

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  3. ben711 April 27, 2017 4:51 pm at 4:51 pm

    I sold PCS on AMZN and iron condors on AMZN and GOOGL, will see how they trade tomorrow. But premiums on both were very high. At the same time holding SOXL June naked calls short.
    But so far QQQ not looking good for short.

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    • GetItRiight April 27, 2017 5:50 pm at 5:50 pm

      What I gave up in trying to understand is that AMZN, for example, is up 14% since the last earnings release, which was a huge miss, in anticipation of a better result at the next release. Now with this better result (probably on lowered expectations), the stock surges another 5%. Probably in anticipation of another blowout quarter. Because why not?

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  4. jegersmart April 28, 2017 5:59 am at 5:59 am

    We are in a time when reason is not relevant. Money has to find a home somewhere and most people these days invest in ETF’s that favour blind allocation to a basket of stocks that may or may not be waaaay overvalued…..When I look back at some of the cars I have owned and sold over the past 10-15 years, I can see that a shit ton of money is even flowing into rare(r) automobiles of all kinds….

    Hopefully the people buying at this stage have stops in place…:)

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