Companies Reporting Earnings 
for the
Week Beginning December 31, 2018

Beating the Downturn – Trading Put Options!

by Ian Harvey

December 30, 2018

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A Quick Review of Last Week’s Market…..

Volatility continued to be the name of the game for the past week on Wall Street. Stocks continued to whip-saw throughout the week; as well as daily; but surprisingly all three major indexes managed to end the week in the green.

For the week, the Dow Jones Industrial Average (DJI) finished up 2.7% at 23,062.4.

The S&P 500 Index (SPX) was up 3.00% at 2,485.74 for the week.

And the Nasdaq Composite (IXIC) also up 3.9% for the week at 6,584.52.

For more insight as to the past week read…..

…..”Stock Market Direction??”

…..”Stock Market Volatility Continues!”

Moving Ahead…..

It may be some time before the bull rally continues to find its’ footing. At the moment, tariffs and the Fed are the two biggest obstacles to the market. But these could just be temporary set-backs, as the second-half of the year is where the economy and the growth pick up again.

Also, earnings growth is expected due to several positive factors; GDP growth in the first and second quarters is likely, wage growth means more money to spend, less payment for gas; makes for an attractive market.

Consumer staples and healthcare are areas that could outperform in 2019 and into 2020.

Retail could continue to move higher, but overall economic conditions don't look favorable for the sector longer term. There is some technical support that supports the retail's bounce experienced last week, but don’t read too much into that for the longer term.  

The put-call ratio, a sentiment indicator in the options market, has been at its most bearish since 1995. This indicates that there are extremely oversold conditions which could indicate some positive sign for the market.

Fear has been driving the market; and with last week’s unprecedented momentum generated by the Dow's record-setting Wednesday, this fear may have been lessened. The economy is still doing pretty well – and many don’t see a recession on the horizon – the end result will be that investors will realize this and the market will bounce back.

So, it is very likely that there are years left to this bull rally. Longer term secular bull markets tend to last 15, 16, 17 years -- the 1949 to 1966 bull, the 1982 to 2000 – this rally is only nine years young. As long as the first quarter doesn’t see any lower lows, expect the markets to power higher in 2019 to hit new highs thanks to healthy corporate profits.

CONTROL OF EMOTIONS AND LESS PANIC WILL HELP YOUR PROFIT MARGIN!

What to Watch

Monday

  • New Year's Eve
  • Final trading day of 2018
  • Regular stock market hours
  • Bond market closes at 2 p.m. ET

Tuesday

  • New Year's Day
  • Markets closed

Wednesday

  • 9:45 a.m. Market PMI

Thursday

  • Monthly vehicle sales
  • 8:15 a.m. ADP employment
  • 8:30 a.m. Jobless claims 10:00 a.m. ISM manufacturing

Friday

  • 8:00 a.m. Cleveland Fed President Loretta Mester
  • 8:30 a.m. Nonfarm payrolls
  • 9:45 a.m. Services PMI
  • 10:15 a.m. Atlanta Fed President Raphael Bostic at American Economic Association and Allied Science Association Meeting, Atlanta
  • 10:15 a.m. Fed Chair Jerome Powell at AEA meeting in joint discussion with former Fed Chair Janet Yellen and former Chair Ben Bernanke
  • 1:30 p.m. Richmond Fed President Tom Barkin at Maryland Bankers Association

GETTING OUT WHILST THE GOING IS GOOD!

GREED CAN BE THE UNDOING OF A GOOD PROFIT!

YOU NEED TO BE IN IT TO PROFIT!

Options Trades to Consider Based on Expected Earnings Reports:

Thursday, January 03, 2019

Simply Good Foods Co (NASDAQ: SMPL), the provider of packaged wellness snacks, protein bars, shakes, and other foods, will report earnings before the market opens. The consensus earnings estimate is $0.19 per share on revenue of $122.57 million; but the Whisper number is higher at $0.21 per share. Consensus estimates are for year-over-year earnings growth of 35.71% with revenue increasing by 15.00%.

Although the stock has appreciated 25% year to date it has suffered against a troubled backdrop in the broader stock market.

For the 2019 fiscal year, management expects total revenue growth to slightly exceed its long-term annual growth objective of 4% to 6%. This is due to near-term supply issues related to rapid volume growth and a high comparison hurdle against 2018's double-digit top-line growth.

Simply Good Foods has recently utilized higher marketing spending to increase brand awareness and drive sales. Total marketing spending in the fourth quarter rose roughly 8% against the prior year to $41.2 million.

Revenue is expected to decelerate this coming year.....

……..Read the rest of the report to see what options trades we are considering......

Not a Member yet?.........SIGN UP

DON'T MISS OUT - MORE TO COME!

Don’t miss out – check out further options trades recommended for the week ahead by becoming a member of Stock Options Made Easy “Earnings Predictions”.

An Important Note: That these suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.

It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented.

If you wish to receive more options trading recommendations similar to this, which will help boost your portfolio strategy, check out the other  memberships available at Stock Options Made Easy.

When To Exit A Trade Based On Earnings?.....

It is also worth considering, when options trading earnings reports – “Do we exit on already existing profits or leave the companies to report their earnings and hope for bigger profit?” 

As most traders realize, there is a 50/50 chance that the company stock price could go either way after reporting earnings – even if the report is good, the stock price could reverse – and if you hold a call option, means depletion of an already good profit if it exists. A similar situation can be found if you hold a put option, and a report is not that sound (and you expect a profit from this) but the stock price can, at times move upwards due to traders bias or other external conditions......READ MORE.....

The Decision Is Yours!

Before You Trade Consider This Strategy……

"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.

……continue reading this article……


”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!

Options traders are not successful because they win.

Options traders win because they are successful.


Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


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”Success is simple. Do what's right, the right way, at the right time.”


Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



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