We have some mega-tech earnings and an FOMC decision on the docket, and of course, the volatile market response to DeepSeek AI that caused numerous stocks to shed massive market cap and others to accelerate to new highs.  So where do we go from here to find predictable moves in the market given the recent and coming major market inputs?

Before we get into the new names, I want to touch on last week’s idea with Visa (V):

Visa continues to climb, and with a significant bullish continuation heading into earnings this week, it’s certainly a trade that I would be looking to move on from.  The AI tools used to predict this move worked spectacularly, but it’s time for me to turn my focus to a new name that doesn’t have a near-term earnings  input to drive the next move.

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So, once again, I’ll start at the top and look for a general market indication by starting with SPY:

The S&P 500 made new highs last week, and then DeepSeek pulled the rug out from under much of the market on Monday.  It seemed to be a situation where market participants followed risk protocols and sold Monday, then looked to see if there were opportunities to buy on Tuesday.  While it has been a volatile start to the week, this behavior has driven some opportunity for both the risk-taker and the risk-averse trader.

Reviewing financials, we see very little impact from this week’s news.  And that’s intriguing to me from a predictive standpoint as it indicates less need to digest the new DeepSeek information, rather focusing on the information seen in recent earnings:

Financials are continuing to press higher.  While that’s enticing, I also like to look for a little bit of leverage from the tailwind of this move as XLF is pressing a potential breakout.

Regional banks may get that much more exciting in that case:

KRE is lagging the move but could certainly catch investors’ eyes.  The FOMC decision may cause a move in financials, so I must be aware of that input, but broadly speaking, I like the opportunity here.

So could that next bullish move be coming from RF?

Regions Financial has been consolidating post earnings and is testing the 50-Day Moving Average.  If the tailwind of financials continues and presses the bigger banks to overbought territory, this could help bring out the value investors looking for financials that have not yet spiked.  And I’m getting AI-driven signals that the time may be now to go for RF in particular, so with what appears to be limited downside, significant upside potential, and low-priced options leverage relative to the broad market thanks to earnings already having been announced, this opportunity looks interesting to me.

If you want to learn more about utilizing AI for predicting dynamic markets and the incredible opportunities that can be captured utilizing state-of-the-art technological advancements in trade recognition, send me an e-mail and I’ll be sure to get you all the information you need!

As always, please go to http://optionhotline.com to review how I traditionally apply artificial intelligence, technical signals, volatility analysis, and probability analysis to my options trades.  And if you have any questions, never hesitate to reach out.

Keith Harwood

Keith@OptionHotline.com

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