Market Report: Earnings drive market crazy

Todd Horwitz Chief Strategist BubbaTrading.com

Be Prepared not Surprised.

Last week was a wild one for markets, from the rip your face off rally to the earnings of Facebook and Amazon. Between the wild rally early in the week to the 300-point Nasdaq drop on FB earnings to the 300-point gain on AMZN earnings.

For the week the indices showed a small gain putting the bear market in question. There are so many issues to worry about, runaway inflation, supply chain and a phony jobs report. Yet markets managed to squeeze out some gains and reverse trend except for the Russell.

As we move into February there are many questions to be answered. The FED has done nothing yet and there is now talk of 2 rate hikes in March. While the FED stands mute the bond markets are getting hammered pushing mortgage rates over 4% for the first time since 2019.

It is no surprise that the options market is as confused as the market, the only constant is call buying leads the way followed closely by put buying, bear call spreads, bull put spreads and bull puts. The VIX remains in the 23 area.

The Bulls were buying AAPL, AMD, SQ, TSLA and SPY while the Bears were selling GLD, VXX, CWH, CLF and AFRM. It promises to be another wild week as markets try and decide the next big trend. 

Remember, we can’t predict what’s next, but the price action will give indications and guide us in the right direction. All signs are starting to point lower however flexibility is the key to trading successfully.

As traders and investors, we have one thing to remember, follow the trend of the market. Be patient disciplined and leave your emotions out. The most important thing to remember is money management and self-control.

Todd “Bubba” Horwitz

BubbaTrading.com