Volatility Box – October 16, 2019

October 16, 2019

What Happened With UAL Earnings?

Yesterday, we created a game plan around trading United Airline’s earnings (UAL).

We said, if UAL gapped up, then probabilities suggest that UAL tends to continue in the same direction for an average of ~$2.01, or to the nearest V-Score standard deviation at $90.33.

UAL did just that today. We gapped up, filled the (small) gap first, and then continued to trend towards $90.60, well above our first target.

Discussion for UAL is available in yesterday’s post, here.

Below are some interesting statistics around earnings (using 2-yrs worth of earnings data) for tomorrow:

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CSX Transport (CSX) – Gap N Go 75% of the time on earnings beat
International Business Machines (IBM) – Gap N Go 87.5% of the time
Netflix (NFLX) – Gap N Go 62.5% of the time
Crown Holdings (CCK) – Fills its gaps (Bearish preference) 87.5% of the time
Crown Castle (CCI) – Gaps down and fills its gap 75% of the time on earnings beat

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Trade Plan & V-Score Targets

As of writing this post at 5:30pm PT, the following trades look as though they will trigger:

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CSX – Gap N Go Bullish on Earnings Beat
IBM – Gap N Go Bearish on Earnings Miss
NFLX – Gap N Go Bullish on Earnings Beat

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Below are some price targets, based on if the pattern that tends to happen repeats itself, and we get a move in the direction towards our bias.

The price targets are derived using the closest standard deviation, with the V-Score indicator.

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Ticker	Preference	Bias	Earnings	Avg $ Move	Nearest SD	Nearest +/-1 SD
UAL	Gap N Go	Bullish	–	$ 2.01	$ 90.33	$ 91.29
UAL	Gap N Go	Bearish	–	$ 5.09	$ 86.18	$ 82.02
ASML	Gap N Go	Bullish	–	$ 3.80	$ 270.29	–
CSX	Gap N Go	Bullish	Beat	$ 1.85	$ 70.51	$ 72.23
IBM	Gap N Go	Bullish		$ 3.48	$ 153.39	$ 163.95
IBM	Gap N Go	Bearish		$ 2.66	$ 138.49	$ 131.68
NFLX	Gap N Go	Bullish		$ 4.43	$ 292.94	$ 319.41
NFLX	Gap N Go	Bearish		$ 3.20	$ 245.47	$ 207.62
CCK	Gap Fills	–	–	–	–	–
CCI	Gap Down Fill	Bullish	Beat		$ 134.57	$ 153.13

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Volatility Box Trade Report

We had a total of 0 trades that set up today, for a net P/L of $0.

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Posted in Trade Reports