What’s happening: This earnings season has been a mixed bag. Amazon.com (AMZN) missed earnings badly on Thursday, reporting a 77 percent drop in second-quarter profits. Intel (INTC) beat expectations but you also could see how much less impact it has because it’s not a FANG stock, the big-name issues that have been driving the market.

Apple (AAPL) is the next FANG to report – it releases earnings on August 1 – and if it misses, you’d expect the market the pullback hard.

The side effects: Trading through earnings season in an extended market anticipating a big, healthy pullback is annoying. It takes a very short-term mentality. The temptation is to try to push your trades through to keep rolling, but the news flow creates too many variables and too much uncertainty.

The play: Nothing, at least not in swing trades on large-cap tech stocks until Apple earnings are out. There’s no reason to jump the gun just because you expect the market to move in a specific direction, at least not while there are so many potential catalysts – earnings reports in this case – that could work against you.

Once Apple reports, it will be time to trade big tech stocks and/or the PowerShares QQQ (QQQ) or Technology Select Sector SPDR (XLK) ETFs with put or call options; I don’t know which yet because earnings season makes the direction unclear, but Apple’s news will help clear things up and I expect it will be time to get in heavy.


Davis Martin is the head trader at Dailyprofitmachine.com. He trades SPY calls and puts and swing trades individual stocks and stock options. At the time this article was published on RagingBull.com, he had no shares, options or open orders in the stocks mentioned here.

Author: Ben Sturgill

Ben leads two services at RagingBull. IPO Payday can help you pinpoint, position, and profit from IPOs. In Daily Profit Machine Ben guides day and swing traders to profit by trading the SPY Index. Ben hosts the RagingBull.com weekly podcast WealthWise where he shares thoughts on wealth and success with traders, businesspeople, entrepreneurs, and experts to uncover and share the wisdom needed to live a wealthy life.

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