This is a critical week for the Nasdaq, as we have heavy hitters, including Tesla (TSLA), Netflix (NFLX), Lam Research (LRCX), Taiwan Semiconductor (TSM), and more reporting, states Danielle Shay of Fivestartrader.com.
Why is this so important? Check out the screenshot below of the Nasdaq futures. As you’ll see here, the high in the Nasdaq that we have yet to reclaim occurred just before Tesla and Netflix reported last quarter. When Tesla fell -4% and Netflix fell -6.4% after earnings on July 19, the weight on the Nasdaq was too heavy. It started its decline and didn’t stop at typical pullback zones, either. It’s continued its choppy decline since.
A Critical Signal: The Put/Call Ratio
What’s interesting about this now, is that earnings initially threw a wet blanket on the Nasdaq. So, the question of whether it will be earnings to get this market going again is in focus. That is especially true given the high put/call ratio and impending short squeeze in the indexes. But we won’t know until Thursday whether or not NFLX and TSLA set it off. This is the major catalyst I’m waiting for. If either (ideally both of these companies) can surprise, this could be the catalyst to send the Nasdaq rocketing higher.
If not, then all we will see is a ‘whomp whomp’ move, with continued lower prices in the Nasdaq and an even wetter blanket thrown on the rest of mega-cap tech going into their respective reports, which includes Amazon, Apple, Microsoft, Alphabet, Meta, and more.
Either way, I’m sure we’ll get a directional move to trade.
Charles and I discussed this on his show, Making Money with Charles Payne, on Friday:
Earnings—Top Tickers to Trade
It’s not only Tesla and Netflix reporting this week, though they are the most critical. And, it’s not only pre- and post-earnings moves to trade, either. I love trading overnight earnings reports, and this quarter is particularly good for it due to the high implied volatility I’m seeing.
Check out my full Top Tickers to Trade watchlist below!
Learn more about Danielle Shay at Fivestartrader.com.
