Originally posted by R.Cox. For the full trading briefing click here
Alcoa and Wells Fargo Bring in the Earnings Season
Expectations were generally low to begin with because of the declining aluminum prices seen in 2012. But the improvement on these expectations, along with the company’s positive outlook comments for 2013 push the stock price higher for most of the week. The other main story was Wells Fargo, which was a more positive story, with fourth quarter profits rising 25% on increased loan activity. Ahead next week, the earnings scheduled is loaded and this will likely lead to increases in short term volatility during the week. The main names to watch will be General Electric, Intel, JP Morgan, Citigroup and Bank of America.
For more than 6 months I have been holding a long spot position in the EUR/CHF, as the Swiss central bank enacted a price floor in the currency pair at the 1.20 level. Moves (upward or downward) have been scarce most of this time but in this last week, we saw a major upside push, which is likely to continue long term. Now, we can start looking at monthly CALL options in the EUR/CHF at current levels
now that the market is finally making some decisive movements.
With earnings expectations tepid at best, it is likely that many companies will be able to overcome the pessimistic outlook and produce positive surprises. Next week’s earnings calendar is stacked, however, and this makes individual stock plays vulnerable to short term price swings. But with the positive bias, I will be looking for CALLS in the S&P 500 between 1450 and 1460
. Risk is obviously for downside earnings surprises this week.