The Trading Baby looks at the most volatile earnings this week April 21st.

Submitted By Andy Wang

Submitted By Optiondragon

I’ve been called a Pagent Dad by some who think I’ve been exploiting Sasha’s innate talents as a stock picker. I don’t lose any sleep over it. She is gifted and pound for pound the best trader I’ve ever met. To hold back this type of talent from the world would be a travesty! This is a big week for earnings and if I wrote about each one individually, by the time I finished and exited my cave (as my wife calls it) Sasha would be driving. I will be analyzing earnings each day in the members forum as their respective dates arrive, rest assured. There are so many earnings, this has to be broken up into days in order to aggregate the newest information and technicals in order to situate one self for pre earnings runs, direct earnings plays and post earnings IV implosion gap trades. The most volatile earnings coming up seem to be VMW, NFLX, AAPL, AMZN, RRC, POT, BG, WHR, BIDU, BUCY, CF, DECK, MEE, DO, UNP.
Sasha also seems to think MA and V could be setting up for a pre run into earnings and a pop afterwards.
Others of importance are ACI, HAL, NBR, STLD, WFT, OIH will be one focus this week with so many components announcing this week ending with DO. ECA, NSC, BTU, SII, ACL, CMG, NE, XTO, RYL (sector importance), BDK, ESV, NFX, OXY, SWN, SU, RIO (sector importance).

Besides earnings I’m looking at some good setups for the May calls and looking at RRC, RIMM (hawk), AAPL, BUCY, RIG, CNX (hawk), ANR (hawk), MTL (hawk), APA, GOOG (hawk). The ones with earnings have to be approached differently or hedged going into thier respective events. Talking with Happy recently, he said he would be eyeing the Chinese tech names such as CHA, SINA, CHL May calls. So keep an eye on China and the movers there.
You still want to keep an eye on the hottest sectors:
Energy- coal (ANR, CNX, MEE, TCK, FDG, WLT), nat gas (UNG, APA, ECA, UPL, XTO, CHK, SWN), oil (USO, XOM, DVN, EOG), solar plays (FSLR, SPWR, STP, YGE, JASO, SOLF)
Steel- SLX, X, AKS, STLD, MTL, CLF, SCHN, MT, RIO, RS
Transports- DJT, UNP, NSC
Ag’s- POT, MOS, CF, AGU, BG, MON, DE

With the Google earnings news and some big upcoming earnings from AAPL and AMZN, we could see some Tech outperformance in the next month relative to the market (short the QID with puts- great idea). Others I’m keeping a close eye on are IMCL, retail sector, GOOG (should go higher on the backs of the GOOG shorts, any shorts since the middle of Jan are now underwater) and the brokers and financials. Everyday I’ll be watching to see if the financials can show continuing strength and if we can get some more follow through from technology. If we do, this market should soar. One third of the S&P 500 is comprised of financials. As we are just coming out of one of the most disastrous economic periods ever, we SHOULD still see some strong gains from these lows from the financials and consumer discretionary (maybe kicked off with the new rebate checks in the mail). “So goes the brokers so goes the market” has been the recent theme, I will be looking for this continuation. I called a bottom on the BSC collapse and so far even though it hasn’t been pretty those market levels and that call remains intact. I believe we are in a buy the dip mentality now and that the “sell in May and go away” will not materialize in the near future due to the “sell the first quarter of the year til breaking point” and the passing of one of the worst performing market periods ever. It also seems that all the bad news is priced in. You can see that by watching how bad earnings is received with loving arms. So if the strongest sectors won’t sell off and the weakest performing sectors are no longer selling off (financials and tech has been holding the market back). What is going to happen next? The housing collapse sure won’t bring in speculative money and bonds aren’t all that appealing. All that money will find a home in US and global equities. Your job is to be the best stock picker you can be and look for high probability setups and shoot the ball.

Questions to answer:
Are the strongest market sectors going to go higher with a stronger market backdrop?
Will there be a rotation out of the strongest into the weakest performing sectors?
Are we going to see a strong level of consolidation here leading to higher highs?
Will buying dry up?
How are companies going to react to good or bad earnings?
Will the market go higher now that technology and financials are participating?
Is the market going to break out of this range?
How high is oil going to go up this week and how does it effect investor psychology?
Or was this just a dream and we plunge into the abyss? LOL

Mr. Sparkle has updated the earnings view for this week. Much thanks and appreciation for his hard work as well as much thanks to all our members who contribute daily (so many to name) to our community.

Mr_Sparkle’s Weekly List:

Key