Take less risk, and profit more this earnings season

by | Oct 18, 2019 | blog, Editorial | 0 comments

There is no in-between. Some traders live for the moment, while others pack their bags and go hiking—that’s how it is during earnings season—where fortunes are made and lost. 

You might think it all sounds risky. Good….because they are. This is why some traders consider trading a stock into the earnings announcement just like throwing craps at the casino table—hoping to get lucky.


I feel the same way. However, most stocks in the market experience the greatest volatility during its earnings date. And that is just too much money on the table to completely ignore the most lucrative aspects of trading. 

Instead of trying to get lucky though, I’ve discovered a way that you can profit off the volatile moves stocks make during its earnings release. 

Believe it or not, it involves ETFs…and you’ll be shocked how easy it is to execute and implement— let alone how profitable.


An ETF strategy for trading earnings


Financial companies are usually boring stocks to trade with overpaid CEO’s that run the world’s banking systems.  

Why trade them during earnings if they are that unpopular?  

Well, I can be certain that anything that makes me money is always getting my attention.  The more it makes, the more I get excited about trading it again.  

To start off, we should break down how this JPM trade made us some double-digit gains from the top.

First, we need to check out the weighting of the stock in the ETF.  In the SPY’s, JPM makes up 1.52% of the total assets of the ETF. That is more than Google!



So this indicates to me that when JPM makes a move it’s going to also move the ETF’s that it makes up a large portion of its holdings.

Next, let’s make sure there is momentum behind these earnings that are going to launch the stock even higher after the market opens. 

It seems there are tons of hype… check out this adrenaline boosting article in the pre-market.


JPMorgan Blasts Q3 Earnings Forecast as Fixed Income Revenue Jumps


Whoa, now that will get those stocks moving quickly.  

Ok so to recap, the stock is a large component of the ETF, and it also has hype from the news media about its earnings.  That is perfect.  

So how do the technicals look in pre-market trading?

On an intraday chart, that looks like a strong bull flag, with a consolidation at the upper end of the flagpole, and all major EMA’s pointing up to act as a support for the stock.



So using the daily timeframe, we need to check and see if any major support and resistance zones are lurking near our pre-market price.



In the pre-market, it is trading around $119 per share.  That places the stock just shy of the all-time highs. Another very bullish sign that is pointing to pushing to break the all-time highs.

Perfect!  This is going to make one awesome perfect storm of a trade.

Looking at the first and second chart, we see that $119 is a resistance level for the stock.  If we can get above this resistance level, we can set our stops below it for our exits and ride the momentum breakout.  

So how did this turn out?



Rocketman we have liftoff.

As soon as the top of that bull flag is broken that was showing us pre-market resistance is getting continuously tested we should see huge momentum to the upside.

And did we ever see such a move?  But did this impact the underlying SPY’s?  Sure did and this is where we focused our attention.  Since the SPY’s have a large piece of JPM we now expect the SPY to move a significant amount as well.



Within the first few hours, this ETF continued to run all morning.  Check out how our team nailed this trade.



That’s right, you can make insane profits rocking earnings in the morning. 



It’s easier than you think! With some practice, you too could be making 25% gains in small ETF movements based on earnings trades.



If you’re ready to give it a shot, start trading my alerts then click here to get started.


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