There have been a number of stocks run up pretty aggressively into earnings reports only to fall flat after the release of the earnings. Tuesday was the most dramatic example as one of my stocks that I like to follow — DataDog, fell 18% post earnings. See similar charts recently for Qualcomm, Taiwan Semi, Square, and PayPal. I don’t see this type of action as being able to sustain any type of rally in the market going forward, except oversold bounces. What I don’t see are any bullish looking consolidations.
AAPL looks like it has the best chance to lead an oversold bounce/ rally. Today it held the support I indicated yesterday. Wednesday it has a decent chance to bounce a bit. CPI is in the morning, so that will definitely be a catalyst. I am not trying to fish any bottoms on AAPL or anything else here. Overall the backdrop for the market isn’t encouraging.
I took a nice profit today on Micron (MU) puts. Straight puts and calls I am a proponent of taking profits while the trade is going your way. Options are an exponentially decaying trading vehicle, so out early is usually better than out late. I still have the bearish put spread in Micron. The spread allows some of that exponentially wasting time value to work for me, so I can be a bit more patient. Ditto the Nike spread.
Overall might well rally Wednesday, but not interested in any longs.