Earnings this week : AMZN, AAPL, META, GOOGL, XOM, GM, AMD ... Mega Caps and Large Caps.
And We have Fed Hike on 1st Feb.
I feel this week will be too volatile but has poor visibility. I will sit on sidelines for this week and prepare for Scalping opportunities.
Possible scenarios :
1. Fed goes 50 bps : then forget market for this week. (10% Probability)
2. Fed goes 25 bps but continues hawkish tone during press conference. Markets will correct. (90% Probability)
3. META Earnings add drama to above : A. Reports beat estimates but decreased revenue numbers YoY and for quarter and increased expenses. And Mark choose mid-path to tone changes and wary of upcoming tough times. (70% Probability)
META may go down to 125s
B. Reports beat estimates with hopeful guidance. (30% Probability) META may reach 180s.
Overall I could feel that after 5 weeks bullish run traders are waiting for slightest opportunity to book profits. And with fed at work, they will off-load which may end the week in negative. This would have additional drag on META post earnings performance. Though tempting, I wont enter META till earnings response is seen.
AAPL : Historically AAPL seldom did good post earnings. I would like to reduce the exposure to AAPL before earnings so will be targeting to offload some more (already did some 6 days back) and hold less. AAPL will report disappointing numbers but hopeful guidance which AAPL lovers will push it 4-5% post earnings.
Just my thoughts based on market progressions, some technicals and fundamentals and market sentiment. Lets see how it goes. NOT A RECOMENDATION. WRITTEN FOR MY PERSONAL TRADING PLAN for the week.
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