Good morning, Power Profit Traders!
Team Tom will once again be dishing out the hot trading knowledge at 11 a.m. ET today, right after my friend Kenny “The Warlock” Glick wraps his highly anticipated presentation on how he plans to day-trade around earnings season.
So hop in the room early and see what the hype is all about, then stick around for your daily lesson from the Tom Gentile crew!
After all, knowledge is power, and it’s important to be prepared for anything as bank earnings kick off the season this week.
In fact, two stocks reacting to earnings this morning — including JPMorgan Chase (JPM) — attracted some pre-earnings option bulls yesterday, landing on today’s Power Profit Trades Watchlist.
We’ll dive into those positions to see how things are playing out, and I’ll explain what levels could come into play on the major market indices this week.
JPM, DAL Calls Active Ahead of Earnings
Last week’s gaps higher — that we discussed in this space just yesterday — have all been filled on the Dow, S&P 500, and Nasdaq.
The thing to watch now?
Whether last week’s pre-gap prices will emerge as support on the charts, and if buyers will start to buy back into stocks, expecting a bounce.
If things don’t rebound, the pivot lows in these major stock indices could act as a floor, and should be monitored this week.
That said, it’s officially Earnings Season!
And ahead of their reports this morning, JPM and Delta Air Lines (DAL) were attracting some bullish bets among the options crowd.
Both stocks appeared on the Morning Report’s Unusually High Call Options Volume tool from the TG Suite app.
DAL’s $43-strike call expiring Nov. 19 was the No. 1 option on our Watchlist.
Buyers of the calls were likely betting on Delta shares to move above $43 after earnings today.
At last check, the airline stock was down 4.6% to trade at $41.50, meaning those $43-strike calls are aren’t looking so hot.
Perhaps the bigger story today, though, is JPM.
The bank stock’s $180-strike call expiring Dec. 17 saw nearly 11,000 contracts traded yesterday.
Considering JPM closed just above $165 Tuesday, it seems buyers were likely rolling the dice on a solid start to bank earnings — and a monster move higher (to above $180) by December options expiration for JPMorgan shares.
Those $180-strike calls are sinking deeper out of the money (OTM), with JPM shares down 2.4% at $161.50 in early trading today.
Will JPMorgan set the tone for the rest of the banks set to report earnings this week? Only time will tell… But you can bet we’ll be monitoring every move.
Now, make sure you hop in the room to catch Kenny “The Warlock” Glick, and stick around for your daily dose of Team Tom — LIVE right here, right now.
Talk to you soon!
Tom Gentile
America’s #1 Pattern Trader
