Here’s How I’m Playing The MSFT Earnings Report
Stock
index futures opened Thursday’s session with another small
earnings-related upside gap. The Dow E-Mini (YM) showed great relative strength
off the open and it was one of those “throw your signals out the window” type
scenarios. The contract essentially ignored the world as it moved up and hit
stops above Wednesday’s high. The euphoria ran out of steam for both the YM and
the ES after the 10:00 Leading Economic Indicators report offered no surprises
and the bulls used it as a chance to take some money off the table. The ES
found support at its Daily Pivot at 1,142.50 and it started to look like deja vu
all over again as the contract clawed its way back into positive territory. But
the bulls were unable to make a firm stand this time and the afternoon turned
into a “chop fest.”
The March SP 500 futures closed
Thursdays session with a loss of -2.00 points, and finished in the lower 1/2 of
its range. Volume in the ES was estimated at 556,000 contracts, which was
behind Wednesday’s pace, and above the daily average. Looking at the daily
chart, the contract narrowly avoided an inside day and posted a spinning top,
while continuing to form a rising wedge. Open interest declined slightly in the
SPH during Wednesday’s rise, showing that some of the “bigger” money probably
used the sharp move to book some profits. On an intraday basis, trend line
resistance again put a cap on the upside and price has now formed a downward
trading channel. 60-min support held throughout the session but after hours
pressure (see below) is pointing to a gap down through it.
Friday gives us no economic reports and the
futures were seeing pressure on Thursday evening from the reaction to
Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating)‘s earnings report.
While I’ll be looking for a gap fill on a gap down open, based on the closing
PREM, I’ll mainly be looking for short entries into 60-min and Thursday’s close
resistance in the 1,144 area. The next day or 2 will give a better idea if
we’re seeing just more “backing and filling” or the beginning of something
bigger to give the top-pickers a couple minutes of glory. Have a great weekend!
Please feel free to email me with any questions
you might have and have a great trading day tomorrow!