If I read one more analyst or pundit explaining to me how earnings are going to be bad and therefore the market is likely headed lower this earnings season, my hair might light on fire.
Here’s the set up as I see it here:
Most analysts are expecting earnings to decline this quarter and have been ratcheting their estimates lower the last few weeks. That might mean that even bad earnings are somewhat priced into the markets already. And if earnings are ok? With sentiment seemingly bearish around earnings and with people expecting bad earnings, that might mean the markets could rally throughout earnings and that companies that report strong earnings and guidance could really rally.
What to do with this analysis? Well, maybe just hold your longs steady. Add a tiny bit of May-ish-dated call options in some of your favorite names. Don’t bet the farm that the markets are going to keep rallying during earnings season. But my feet-to-fire guess is that it does.
Now for a public service announcement on Bitcoin from a loyal Trading With Cody subscriber:
Hey Cody!
Thanks for the Trade Alert on Bitcoin.
I’ve been following some of the Bitcoin / crypto questions you receive from TWC subscribers. Thought I’d provide some (hopefully helpful) feedback for some of those questions (I get a sense most of your TWC’s haven’t done their homework on crypto and look to you as a “crypto expert”. The “fear” I have is many might see crypto as similar to a stock, when in fact they are wholly different asset classes.):
1. “Where can I buy Bitcoin?” – Coinbase, Gemini, and Kraken are three reputable crypto exchanges for purchase of crypto. They follow some good guidelines / policies / procedures relative to Know Your Customer issues, funding protocols for purchasing crypto, and ease of transfer of purchased crypto to a “cold wallet”.
2. “Where can I store / hold my crypto securely?” – Generally, most “experts” would recommend moving crypto off any exchange (Coinbase, etc.) to an offline “cold wallet” like LEDGER or TREZOR. These are USB-type devices which hold private keys to access your crypto.
3. “What crypto should I buy? What is the best crypto?” – Generally, these types of questions highlight the lack of knowledge TWC’s have around the crypto space. If they are asking these questions, I would suggest recommending they do their homework to understand the distinctions between Bitcoin and every other crypto. Bitcoin, and each crypto, are specifically designed for different projects and use cases (and I strongly agree with some of your comments that perhaps 95% or more cryptos are fraudulent). Feet to fire: I agree that Bitcoin is the “safest” crypto asset for long-term and everyone should acquire at least 1 or 2 BTC (even if they don’t fully understand the tech / crypto); Ether / XRP / XLM / BCH and maybe a one or two others, are additional crypto’s that have merit.
4. Helpful resources for TWC’s: https://www.bitcoin.com/bitcoin.pdf, Coindesk.com, Coinbase.com, Kraken.com, The Bitcoin Standard (book), plenty of quality videos on YouTube from reputable sources such as IBM, Fidelity Digital Assets, Fundstrat, Draper, Bakkt, Bloomberg, etc.
5. I’d love to see if you could arrange (or report on) a TWC interview / conversation with: Caitlin Long, Tim Draper, Tom Lee, Andreas Antonopoulos, Saifedean Ammous, Mark Yusko, Anthonoy Pompliano, or other contacts you might have in the finance or crypto space.
Best ~
Ken
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