Welcome to the morning report, where I go over the setup for the day as it relates to day trading. I’ll review levels using options gamma and show you where the support and resistance lie along with some other proprietary metrics like options skew and my very own Day Trading Bar Score that have good track records for forecasting bullish or bearish tendencies for the day.
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Today’s Setup
We are gapping down and most of the action took place once the US session opened for early trading around 7 AM EST. So, US traders are a little spooked.
The catalyst was WMT earnings and they were good earnings, but folks are interested in what they think about the future and what’s to come.
And what they said was not pretty. They guided their Q3 under estimates and their same store sales metrics were the worst in 6 years. That’s not good. The consumer is not well. None of that is surprising, the Iran War is sapping poor (and now middle to upper middle class) folks.
WMT 0.00%↑ is down a whopping 7% (which is ALOT for that stock). It’s probably a buying opportunity. WMT has gapped down now the last 3 earnings announcements. Oof!
The Options Flow Oscillator shows a lot of hedging before the print, so that usually cushions it from further damage. We’ll see how it turns out - WMT is normally 50/50 after a big gap down on earnings a month later. There isn’t much edge in trying to buy an earnings dip on it.
We continue to see mounting evidence that the Economy is tipping over. The Economic Surprise Index, which counts how well the economic data is doing relative to expectations is just in free fall the last few weeks. Something has shifted, that’s for sure. It’s bad and getting worse for the consumer.
