October 26, 2022

Markets:

U.S. stock futures fell Wednesday after disappointing third-quarter results from Alphabet and weak revenue guidance from Microsoft marked a foreboding start to Big Tech earnings this week.

Wednesday’s early performance is a turn from the past three days of the major indexes rising. On Tuesday, the Nasdaq ended up 2.2%, while the S&P 500 and Dow added 1.6% and 1.1% higher, respectively. Tuesday’s close marked the first time in October the major indexes rallied three days in a row.

Shares of Google-parent Alphabet dropped 6% in the premarket. The online search giant missed expectations on the top and bottom lines. Alphabet also reported a decline in YouTube ad revenue, which spurred investors to deliberate the outlook for other tech companies that rely on ad spending.

Meanwhile, Microsoft declined about 6% after the tech giant reported weaker-than-expected cloud revenue in its latest quarterly results, despite beating earnings and revenue estimates. The company also issued current-quarter revenue guidance that fell short of expectations.

A mixed bag so far, corporate earnings season continues Wednesday. Kraft Heinz shares rose after the company reported beating revenue and earnings per share expectations before the bell. Meta was among the companies also set to report.

Bond yields continued to retreat coming off a period of volatile trading.

Portfolio:

We enter the new trading session holding positions in SPWR, FAZ, TBT, SNAP, ALLY, and PARA. We will be looking to add today so please be on alert as indictors continue to ignite here, especially with what is taking place in the tech sector right now. Today, is a monster day for the markets.  It's decision day! We will either trap the shorts here and then rip or we see a monster sell off back towards 3500 potentially begin. I'm a bit surprised how they carried this market higher the last two sessions with low volume and liquidity. VIX continued to rise and at one point yields as well. Everything was rising and yet we continued higher. Now here we are today, and this is the perfect scenario for trap city and rip it higher towards 4k on the S&P or we break lower and flush it. I cannot stress this enough; the price activity is there for this. Allow the market action to materialize early this morning and then we proceed with new opportunities today. Be ready and let's have a great session.