Today is my wedding anniversary. 12 years I have been blessed to be married to a woman who has been so patient with me and who as been through the worst and the best of what life has thrown at me and she is still here. For that I am grateful. I’m determined to make this a good day, just for her.
Today is also Alphabet / Google earnings day. You can check out their press release from when they announced the date of the Q2 earnings call here. Since I’m a futures trader, I need to know this mostly so that I step aside and get out-of-the-way when they announce. You can be sure that the market will move and you don’t want to get caught on the wrong side of this move.
Alphabet last released their earnings on April 23, 2018 and that proved to be a day with very nice volatility. Overall the day had a range of over 110 points and the range post earnings numbers (the last 15 minutes of the session) was better than 40 points as seen in the image below.
All this is to just make sure you are mindful of the kind of day you might see today. Nothing is certain of course and we do have additional market uncertainty as a result of President Trumps Tweeting overnight.
To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!
— Donald J. Trump (@realDonaldTrump) July 23, 2018
Today’s Trade Plan
As it stands right now, the overnight inventory is about 90% net short. So my first thought is to watch for that counter auction to correct the overnight inventory back to Settlement at 7360. There still remains a small area of repair from the July 17th chart on route to settlement and there is also a small area of repair from Friday’s chart at 7370.50. Getting above the overnight high at 7377.50 will give me more confidence in taking this back up to Friday’s value area high or possibly Friday’s range high with a good earnings call from Alphabet.
For my second scenario, we could see price chop around in between the overnight low and Friday’s low until the earnings call and then depending on whether Alphabet beats or misses, price could shoot up or crash down even further and break out of the lower range of the channel I discussed in my post from last night.
For my third scenario, I could see price failing to fill the price gap to settlement early on, and the market moving into cleanup mode and repairing the areas needing repair below on the chart before grinding higher and breaking out to a new high post earnings.
There is still plenty to clean up below and it wouldn’t be unusual for the market to push down to reload for a positive earnings report.
The beauty of the market is that it can and will do what it wants. I’m giving myself a few options to look out for, but I will trade what I see in the moment. This is just a plan and some of the best plans can go awry in an instant.
Have a good trading day everyone!