Tuesday Market Outlook: October 17, 2023

[Image] Tuesday Market Outlook: October 17, 2023 Stop what you’re doing! This needs your attention… With fall volatility ramping up, the market is walking a fine line right now. Imagine a tightrope walker, carefully balancing herself… On one side, she holds a net filled with significant geopolitical events… And on the other, a sack of corporate profit reports. Her balancing act — much like the stock market this week — is dependent on the interplay between these two major catalysts. With that in mind, it’s time to dive deep into my Tuesday Market Outlook. Keep reading to see my full breakdown of the major events, reports, speeches, and catalysts I’m watching closely this week… Revealing the Macro Backdrop To start, let's revisit the scene from last Friday. For those who might've missed it, the VIX, often dubbed the market's "fear gauge," made waves as it approached the notable $20 handle. The VIX attempts to measure the market's nerves, telling us how jittery or calm investors might be about the future. When this number creeps up, it's a sign that investors expect more volatility in the market. Parallel to this, WTI crude oil, a benchmark in the oil world, surged by 6%. This shift isn't just about numbers — it’s about how intertwined global events, energy demands, and market sentiments are. When we piece these observations together, a clear message emerges… The market has blind spots. REMEMBER: The market will often ignore obvious risks … until one day, it suddenly doesn’t. All Eyes on Powell’s Speech Come Thursday, all eyes and ears will be tuned to the speech from Jerome Powell, the Chairman of the U.S. Federal Reserve. But this isn't just another routine Powell speech. Given that it's his first public appearance since the breakout of tensions between Israel and Hamas, the anticipation is palpable. Beyond geopolitical insights, traders will be listening for any subtle hints about the future of interest rates and the broader economic landscape. Now, for those watching the bond market, there’s been an undercurrent that's hard to ignore… The 10-year treasury yield, a pivotal indicator of long-term interest expectations, has edged over the 4.6% mark. Why should you care about this move in the bond market? Well, if yields stay elevated (or climb even higher), the stock market could be in for some serious chop. Higher rates generally mean that borrowing money becomes more expensive, which can slow down spending and investment, which affects companies' earnings and, in turn, their share prices. And speaking of share prices, there’s another critical factor to watch this week — earnings. The 3 HUGE Earnings Reports I’m Watching This Week It’s time to switch gears and talk about the three upcoming earnings reports I’m watching closely this week… First, Goldman Sachs Group Inc. (NYSE: GS) reports today, before the bell. Leading into this report, the backdrop is largely positive for big banks. JPMorgan Chase & Co (NYSE: JPM) and Citigroup Inc. (NYSE: C) both reported strong earnings last week. And given Goldman’s historical knack for nailing the ebbs and flows of volatile markets, I’m expecting it to report a beat. But tomorrow, Wednesday, promises to be the turning point of the week, with back-to-back heavyweight earnings announcements… Netflix Inc. (NASDAQ: NFLX), the streaming giant, is set to share its earnings after the bell. But with such a big implied move (more on that later), it’s difficult to find a great setup on NFLX. Making an earnings bet on NFLX here feels like going all-in on a coin flip in a high-stakes poker game. I can find better odds elsewhere. Then, on the same day at the same time, Tesla Inc. (NASDAQ: TSLA) will release its numbers. This report is intriguing for two reasons… Not only has Tesla’s share price managed to hold its ground in recent times, but it’s done so in a landscape where several other automobile giants have been selling off. WARNING: Big-tech traders should be extra conservative on Thursday. With such important earnings reports coming down the pipe, volatility will be heightened and anything could happen. Trade accordingly. Don’t just listen to me, take it from JPM CEO Jamie Dimon: ["We are facing so many uncertainties out there, you just got to be very cautious."]( A Closing Thought About Implied Volatility As this symphony of earnings plays out, there’s one metric you should be paying close attention to — implied volatility (IV). IV offers a glimpse into the expected stock movements… A higher IV usually suggests that the market makers believe a stock will have big price swings. This makes the options contracts more expensive (and more difficult to profit from). Understanding this is crucial for choosing the right position sizes, strike prices, and expiration dates during earnings season. As always… Stay Street Smart, Jeff Zananiri P.S. My overnight trade idea has already been delivered to Burn Notice Members, but the next one could be even bigger! DO NOT MISS IT — [Click here now to get my next idea!](   66 West Flagler Street STE 900 Miami, Florida 33130 United States [Facebook]( [Twitter]( [Instagram]( [YouTube]( [Click Here to Unsubscribe]( **Our gurus teach skills others have used to make money. Any results displayed are extraordinary and are not typical and will vary from person to person. For more info read our [Earning Claims Disclosure]( About: Making money trading stocks takes time, dedication, and hard work. My goal is to teach you how I have succeeded in the market, but you may not achieve my results. Remember, there are risks involved with investing, including the potential loss of money. 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