Nervous investors set the stage for massive post-earnings moves in Wall Street's biggest stocks
The stock market is running out of juice and needs a charge from second-quarter earnings.
The pace of earnings reports is heating up. Notable stocks on deck to release second-quarter earnings next week include Apple $(AAPL)$, Amazon.com (AMZN), Chipotle Mexican Grill $(CMG)$, Meta Platforms (META), Microsoft $(MSFT)$, PayPal Holdings (PYPL), Qualcomm $(QCOM)$ and Starbucks $(SBUX)$.
The table below lists stocks reporting earnings next week whose options are showing increased implied volatility. That is, the option market is expecting a potentially volatile move after the earnings news.
Our approach is to attempt to buy the shortest-term straddle possible (generally the one expiring on the Friday after the earnings reporting date) and to exit at the close of the first full day of trading after the earnings have been reported. For the stocks in this table, that would mean buying the straddles expiring on Aug. 2, or the next nearest date if that expiration date not exist for a particular stock.
Specifically, the columns below (from left to right) are:
Date: the earnings reporting date
PM?: whether the earnings are to be reported before the market opens ("N") or after the market closes ("Y")
Symbol: the stock symbol
Needed: the most that we would pay for that near-term straddle, with the price of the straddle expressed as a percentage of the underlying stock price. In reality, this is the percentage move that is smaller than six of the past ten post-earnings moves in this stock.
OptVol: the 20-day average of total option volume on this stock. Low numbers here indicate a potentially illiquid situation.
Date PM? Needed OptVol 7/28/2026 AM PYPL 7.73% 86,518 7/28/2026 AM UPS 5.28% 18,350 7/28/2026 PM BE 8.24% 89,213 7/28/2026 PM ENPH 14.16% 22,486 7/28/2026 PM STX 6.84% 6,183 7/29/2026 AM 3.32% 1,040 7/29/2026 AM LMND 14.85% 7,117 7/29/2026 AM SOFI 6.36% 328,662 7/29/2026 PM CMG 3.03% 38,621 7/29/2026 PM CVNA 12.09% 39,759 7/29/2026 PM FTNT 8.41% 15,365 7/29/2026 PM META 8.55% 484,966 7/29/26 PM MSFT 0.0392 577,123 7/29/26 PM QCOM 0.0773 88,385 7/29/26 PM SBUX 0.0121 16,129 7/30/26 PM AAPL 0.0068 1,209,274 7/30/26 PM AMZN 0.0555 671,819 7/30/26 PM COIN 0.0464 100,634 7/30/26 PM FSLR 0.0486 11,865 7/30/26 PM RDDT 0.0675 29,108
Check these stocks just before the earnings are announced, for that would be the time to buy the straddles (buying or selling a call and a put with the same strike price) or strangles (a call and a put with different strike prices), if they do satisfy the "needed" requirement.
Traders are getting nervous
The S&P 500 Index SPX is struggling. A new short-term overhead resistance point is 7,525. The index broke through a main support at 7,430 on July 23; the next support level is 7,300.
The "modified Bollinger Bands" (mBB) continue to contract. Our MVB sell signal is still in place, with a target at the -4<SIGMA> Band, which is now just above 7,300 and rising.
Equity-only put-call ratios continues to rise, and both ratios are back on sell signals now. That will continue to be case as long as these ratios are rising. With the political and economic uncertainties, traders are buying puts on their stocks, even though they might be buying stocks as well.
Market breadth is poor - both breadth oscillators remain on sell signals.
New 52-week highs on the NYSE outnumbered new lows by single digits for the third day in a row, keeping this buy signal intact.
The VIX VIX jumped above 19 on July 23 before settling below it. Two consecutive trading-day closes above 19 would terminate our trend of VIX buy signals.
Still, the construct of volatility derivatives is bullish for stocks. The front-month VIX futures contract is now August, and that is trading well below September. Also, the rest of the term structure is sloping upwards, and the futures are trading at a premium to VIX.
Yet traders are getting nervous. Fundamentally, Iran, interest rates, oil and other uncertainties are upsetting market equilibrium. Volatility traders are wary of what August could bring. We will follow our indicators and watch to see if the volatility indicators turn bearish. Meanwhile, continue to roll deeply in-the-money options.
New recommendation: KeyCorp puts
There is a new sell signal from the weighted put-call ratio in KeyCorp (KEY). Sentiment has gotten overly optimistic, as there has been an excess of call buying. This caused the put-call ratio to form a local minimum on its chart, and that is a sell signal.
From the chart of the put-call ratio of KEY, one can see that there were two previous sell signals in the past year, and both resulted in a modest decline in the stock price.
Buy 6 KEY (Sept. 18) 23 puts in line with the market.
Hold these puts as long as the weighted put-call ratio for KEY is on a sell signal.
Follow-up actions
All stops are mental closing stops unless otherwise noted.
We are using a standard rolling procedure for our SPY SPY spreads. In any vertical bull or bear spread, if the underlying hits the short strike, then roll the entire spread. That would be roll up in the case of a call-bull spread or roll down in the case of a bear-put spread. Stay in the same expiration and keep the distance between the strikes the same unless otherwise instructed.
Also, for outright long options, roll if they become 8 points in-the-money.
Long 1 BNS (BNS )(Sept. 18) 85 call: Raise the trailing closing stop to $85.50 for the calls.
Long 2 RTX (Aug. 21) 205 calls: We will hold as long as the weighted put-call ratio for RTX $(RTX)$ remains on a buy signal. RTX traded at 205 this past week, so these calls were rolled up.
Long 2 IR (Aug. 21) 80 calls: Hold as long as the weighted put-call ratio for IR $(IR)$ remains on a buy signal.
Long 0 CLOV $(CLOV)$ (July 31) 4.5 calls: These calls were stopped out on July 16.
Long 1 SPY (Aug. 7) 757 call and short 1 SPY (Aug. 7) 777 call: This is the trend of VIX buy signal. Stop out if VIX closes above 19 for two days in a row.
Long 1 VRNS (Aug. 21) 45 calls: Continue to hold without a stop, as the takeover rumors persist for VRNS $(VRNS)$.
Buy 2 ALLE (Aug. 21) 140 calls: We will hold these calls as long as the weighted put-call ratio for ALLE $(ALLE)$ is on a buy signal. ALLE traded above $150 on July 23, so these calls should be rolled up.
Long 2 UVIX UVIX (Aug. 21) 95 calls: Hold without a stop.
Long 1 JKHY (Aug. 21) 145 call: Hold this call as long as the weighted put-call ratio for JKHY $(JKHY)$ is on a buy signal.
Lawrence G. McMillan is president of McMillan Analysis, a registered investment and commodity trading advisor. McMillan may hold positions in securities recommended in this report, both personally and in client accounts. He is an experienced trader and money manager and is the author of "Options as a Strategic Investment." www.optionstrategist.com
(c)McMillan Analysis Corporation is registered with the SEC as an investment advisor and with the CFTC as a commodity trading advisor. The information in this newsletter has been carefully compiled from sources believed to be reliable, but accuracy and completeness are not guaranteed. The officers or directors of McMillan Analysis Corporation, or accounts managed by such persons may have positions in the securities recommended in the advisory.
-Lawrence G. McMillan
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(END) Dow Jones Newswires
July 25, 2026 10:21 ET (14:21 GMT)
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