Jeff Bishop(Weekly Money Multiplier) – FedWatch-Earnings Edition

The Dow is trading higher this morning, led by Apple which is up 5% today.  It surprised Wall Street by producing better than expected Q4 numbers. Ironically, it was just a few weeks ago when the company issued a press release stating it’s lowering guidance.

Funny how the market works sometimes, isn’t it?

That said, it’s going to be a busy afternoon and evening for stocks. After the market closes, we’ll be receiving earnings announcements from Tesla, Microsoft, Facebook, and Visa.

As much as I want to think Tesla is going down after earnings, something inside of me knows that Elon is going to dig deep into his bag of tricks and find a way to surprise investors tonight.

Before we can even get to that, there are several key economic catalysts to watch.

For example, at 2 PM ET, the FOMC will be announcing their latest decision on interest rates. FOMC Chair Jerome Powell will be speaking at 2:30 PM ET. Also on the plate today – high-level trade talks between the US and China will be held in Washington.

As for me, I’m watching and waiting.

You see, with so many potential ticking time bombs lying around, I’d rather wait and see where the dust settles before putting my hard-earned money to work.

What’s going to push to make a move?

I’m watching macro-variables like interest rates, support and resistance levels, crossover patterns,  shifts in volatility, and of course… catalysts.

However, once I catch a whiff of an edge…something that gives me an advantage…you better believe I’m putting risk on…and trying to multiply my money.

Here are some positions I have sprinkled on:

Here’s a starter position I just put on… an hour in…and its generated 10%+, or $1,100 in unrealized gains. That’s a heck of a lot better than just the traditional buy-and-hold the market strategy.

That said, patience remains the name of this game for now.

However, once news is out…you’ll want to be ready to act. That said, here is my Fed preview along with what the street is expecting for this week’s earning releases.

FedWatch – Earnings Edition

Now, the Federal Open Market Committee (FOMC) meeting will end today, announcing its monetary policy decision later today. For the most part, the FOMC has noted it would be “patient” and “flexible” – reminding me of the former Fed Chair Janet Yellen days – when all they would say is we’ll wait and see.

The reason being: there are so many factors that could affect their decision to raise rates. For example, the Consumer Confidence Index fell more than expected – letting the fed know that consumers might be on edge. Additionally, there are uncertainties in Europe, as the United Kingdom is scheduled to leave the European Union on March 29, 2019. Moreover, the U.S. and China are still going through trade talks and they are looking to strike a deal by March 1, 2019.

Since none of this data is controlled by the Fed, the only thing they can do is control its monetary policy tools. For the most part, traders expect the FOMC to leave the federal-funds target rate unchanged.

Here’s a look at the CME Group FedWatch Tool:

You see, the FOMC understands that there are risks on the table, and no one wants to be the person to spark a market selloff. That said, the Fed is expected to leave rates unchanged for the time being.

In addition to all of the global risks, the FOMC also has to watch out for earnings from large technology names this week.

When the markets are heading into a volatile event, such as earnings. They typically quote the price or implied volatility of the straddle. Now, a straddle consists of purchasing one call option and one put option with the same expiration date. You see, this gives us an idea of how much a stock will move that week in either direction.

That said, here’s what the at-the-money (ATM) straddle is implying for the week:

• Amazon.com Inc (AMZN) implying a 5.8% move.
• Microsoft (MSFT) implying a 4.6% move.
• Facebook (FB) implying a 6.9% move.
• Visa (V) implying a 3.4% move.
• Qualcomm (QCOM) implying a 5.5% move.
• Wynn Resorts (WYNN) implying a 6.9% move.

For example, AMZN is reporting earnings this week. That means the market expects the stock to move 5.8% in either direction.

I’ll be here tomorrow to give you an update on all these events and more. I’ll be mainly chilling on the sidelines till then, and watching this presentation.