From the Wall Street Journal’s “Stock Futures Waver Ahead of Big Tech Earnings” posted early Wednesday:
U.S. stock futures wobbled ahead of corporate results that will provide insight into the effects on the technology industry of inflation and supply-chain disruptions, including from the global chip shortage…
Telecommunications giant Verizon is scheduled to post earnings before the opening bell. Tesla and IBM are expected to report after markets close.
Stocks have climbed in recent days as investors parsed strong earnings. Major companies have said that labor shortages, higher raw-materials prices and supply-chain issues haven’t eroded profits substantially, reassuring investors.
For tech companies like the ones reporting Wednesday, investors will be watching for an update on disruptions in the semiconductor space and the ability of large firms to increase prices to consumers, according to Kiran Ganesh, a multiasset strategist at UBS Global Wealth Management.
“Markets are taking a bit of a breather after a very strong run. Earnings are very good so far, across a pretty broad range. We’re looking out for margins, and comments on input costs, and we haven’t really seen too much concern on that,” he said. “This is what’s really been supporting the rally.”
My take: Yahoo!Finance sees a bullish commodity channel index pattern. Max pain inched up to $142 from $141 overnight.
UPDATE: Since this was posted, max pain slid up to $145. More likely a delayed update at maximum-pain.com than a burst of premarket option sales.
One notable factor I observed from the recent “Unleashed Event,” was Apple’s lack of reticence related to pricing increases. The price of the new 16 in. MacBook Pro increased by 4%, entry-level AirPods by 13% and 54% for the new 14 in. MacBook Pro compared with the previous 13 in. model. Apple continues to instill confidence in me that they do not expect the higher prices (meaning increased margins) to soften demand. We are going to see in the coming quarters ever increasing continuing robust, eye-popping numbers that can’t help drive Apple’s stock price to $175 in the short term and $200 in 2022.
Ordinarily that’s what you would expect, but that isn’t what we have seen from the last 3 post earnings reports.
Hoping I’m wrong and you are right this time around.
Shouldn’t your comment read this way?
We are going to see in the coming quarters ever increasing continuing robust, eye-popping numbers that can’t help but drive Apple’s stock price to $175 in the short term and $200 in 2022.
Thats called good marketing.
I think the hesitance to buy higher Strikes or push current prints higher is past WS response to Apple’s earth shaking earnings blowouts. A lot of investors got massively burnt by those irrational responses. Three times burnt, once cautious is in play.
In response to Thomas’s observation that we didn’t experience sell the news this event cycle. I agree. That was part of my decision to go long the NOV 19 Call at $150 a few weeks back, then sell short term Calls against that position.
I didn’t foresee the significant and very positive response to the M1X reveal, so the OCT 29 $150 Calls I sold just before Monday’s event started, are going to cause the whole kit and kadoodle to be exercised (Called away) on the 29th. Not to worry, the cumulative ROI on the defensive strategy will yield ~130% profit to me.
I am looking to modify my Weekly strategy to selling long term Calls, then selling short term Calls against them because of this. I have been using my data base of daily prints to back test the strategy modification. It looks really good. I’ll post more on this later.
Should read: “ buy higher Strikes or push current prints higher is due to past WS response to Apple’s”.
Volume was again very low today.
Volume is low because Sellers aren’t willing to forego potential future gain, and Buyers are apprehensive about pushing AAPL higher because of past WS responses to Apple’s earnings reports.
As a buyer I’m leery of higher prints as well, which is why I bought NOV $150 Calls (get well past OCT earnings report).
Call walls, like the so-called Max Pain, are not static. To the contrary they move in response to investor sentiment, another reason I use ISM (Investor Sentiment Multiplier) in lieu of PE. ISM is so much more descriptive of what the dynamics of value are than Price to Earnings ratio. It helps me understand what is happening more clearly.