Volatility Box – October 18, 2019
Buying the Dips in the Indices
We had volatility that entered the markets, without any real warning. There weren’t any major news events or reports. It was just another, typical Friday.
The Nasdaq (NQ) futures indicated to us early on in the day that they were the more volatile of the index group today. While the S&P (ES) and DOW (YM) futures were contained using the Aggressive Volatility Box, the Nasdaq was not.
Using the Volatility Box in conjunction with the Supply Demand Edge indicator (free, link below), gave us the absolute best entry for the reversal in the S&P futures. It helped us filter through the false signals, giving us the context of edge.
We had a total of 7 trades that set up today, for a net P/L of +$910.
That brings our weekly P/L to -$577.50.
Earnings Corner
We had earnings plays that presented themselves in KSU and STT. KSU ended up being a big winner, surpassing even the average move in the Gap N Go earnings strategy. STT had a meager gap up, but did not fill that gap, before continuing to drift higher.
For Monday, we have some upcoming earnings plays in CDNS, SAP, AMTD, and ZION.
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.
We have added in some new labels in the Smarter Earnings indicator that now displays not only the average bullish or bearish dollar move (for a Gap N Go), but also the lowest moves.
We’ve found this to be more accurate, and useful, than using the V-Score in trying to plan out trades.
[su_table responsive=”no” alternate=”no” fixed=”no” class=””]| Ticker | Preference | Bias | Earnings | Lowest $ Move | Avg $ Move |
| KSU | Gap N Go | Bullish | Beat | $ 1.16 | $ 2.38 |
| STT | Gap Fills | Both | Beat/Miss | – | – |
| CDNS | Gap N Go | Bullish | Beat | $ 0.25 | $ 1.34 |
| SAP | Gap N Go | Bearish | – | $ 1.15 | $ 1.81 |
| AMTD | Gap N Go | Bearish | Miss | $ 0.34 | $ 0.84 |
| AMTD | Gap Down Fill | Bullish | Beat | – | – |
| ZION | Gap Down | Bullish | Beat | – | – |
Smarter Earnings Tools Updates
We also released an updated version of the Smarter Earnings tool, which contains a few updates:
[su_list icon=”icon:check” icon_color=”#333333″ indent=”15″ class=””]
- Compare gaps to expected moves
- Upcoming earnings expected move calculations
- Lowest gap n go bullish $ moves
- Lowest gap n go bearish $ moves
[/su_list]
Use the link below to download the latest version of the indicator, for free.
Resources:
- Click here to download the Smarter Earnings indicator (FREE)
- Click here to download the Supply Demand Edge indicator (FREE)
Sign up for a 30-day risk free trial to start trading with the Volatility Box.