1.31 Market Trade Plan
FOMC & Earnings Notes
UPS 0.00%↑ came out this morning pre-market with a disappointing earnings call - make of it what you will as a read on the economy at large. They plan to cut 12,000 jobs and a goal of reducing $1B in costs after a disappointing 2023.
With a situation like this I would rather look for a day 2/day 3 trade - meaning that tomorrow and into the end of the week look to day trade this long or short, but I think given the earnings, short.
The news catalyst will drive liquidity on this (meaning I expect portfolio managers/holders of the stock) to trim their position so that means it’s a high quality day-trading issue to now focus on - we can worry about buying and hold it in a few months time.
This is another way to drive idea-flow and this is really an event-driven trading framework more than a simple “chart pattern or head and shoulders signal” - that’s important to me whether it’s the day trading cap on or value/swing cap on and I’ll explain more about this in the members premium post below.
The indices are still in hurry up and wait mode with large earnings post market today so nothing to report on there that needs to be said.
Crude oil held steady and the EIA report tomorrow should propel us above the Sunday night high so no real changes there either. Most of the time, when an inflection starts, you just have to ride it out so with crude it’s just a matter of being positioned - from there your job is done.
Speaking of more energy long there is a new name on the radar to watch.
The interesting news to me was SLB 0.00%↑ today which dropped about -10% at the low point on news that Saudi Aramco to lower capacity on demand worries.
The balance sheet is solid so if this can drop a bit more in the coming weeks it gives a better technical entry to this name as a swing-trade. So, another event-driven catalyst here on this name but the difference is you have strong fundamentals and a bullish tailwind in energy at large. So, add in the technical overlay and we have the making of a new potential long entry.
If you’re reading and asking why it’s not a day-trading issue - simply put, the volatility profile on it doesn’t make it worth it and there are better ways to allocate your money to stocks/ideas (like $UPS) that have the vol you need for momentum day trading to work, but, this is a new long soon.
In the Premium Video Tonight I cover:
S&P, Nasdaq and Crude plan for tomorrow
More on UPS and event-driven trading
PYPL 0.00%↑ trade
Scenarios to watch for post-earnings tomorrow