How This Expert Options Trader Is Preparing For The Market’s Next Big Move

How This Expert Options Trader Is Preparing For The Market’s Next Big Move

Posted On April 28, 2023 9:49 am

The battle between the bulls and bears is intensifying this week as major earnings reports are released and the latest inflation news is digested.

The key isn’t the reports and the numbers that will be released, but rather the market’s reaction to them. The bulls have been persistent dip buyers recently and have been able to shrug off various negative headlines.

There hasn’t been much upside progress, but support is holding, and the bears have been incapable of producing sustained selling pressure.

Since the start of the year, the bears have been convinced that the market would eventually be forced to recognize that growth is slowing, a recession is coming, and corporate earnings will fall. Even the Fed has admitted that a ‘mild’ recession is likely.

However, the bulls just aren’t buying the argument. They may be convinced that inflation is under control and the Fed will likely start cutting rates later this year. If there is any economic slowing, it will be mild, and the Fed will address the problem quickly.

The battle lines are drawn, and the reaction to earnings this week will provide some insight into whether the concerns about economic growth are gaining some traction. Microsoft (MSFT)Meta (META), and Google (GOOGL) have all reported this week, along with hundreds of other names from a variety of sectors. These big tech earnings reports have shown they’re still able to post better-than-expected results, despite any economic slowing. However, this hasn’t been quite enough to send the market higher… yet.

Last week, an adverse reaction to Tesla’s earnings caused some weakness at the end of the week and there was some soft action again on Monday morning. But big tech has the boom in Artificial Intelligence, which may offset weakness in other areas.

My game plan is to

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About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.