Earnings season has begun with the leading financial stocks reporting earnings this week. Today, J.P. Morgan Chase & Co (NYSE:JPM) and Well Fargo Co (NYSE:WFC) reported earnings before the opening bell. These stocks were holding up well at the start of the session, but have faded and are now trading negative on the day. It should be noted that these stocks have rallied higher before the earnings announcement. This indicates that the market may have already had the recent rally “baked into the cake,” meaning priced in. Traders and investors will now have to watch the chart pattern that unfolds in these stocks throughout the remainder of the week.
Tomorrow, more leading financial stocks will report earnings. Bank of America (NYSE:BAC), Citigroup Inc (NYSEC), Goldman Sachs (NYSE:GS) and Charles Schwab Corp (NYSE:SCHW) will report earnings before the open. After today’s earning reports nobody is expecting the numbers from these banks to be good. So again, it will be all about the chart pattern that is formed. Traders and investors should note that this is still a very technical market. This means that trading levels and chart patterns will dominate the moves in stocks – throw the fundamental analysis out the window for now! This rule will apply for all stocks going forward. Believe it or not, support and resistance levels are now important again. Use them like the rare smart money traders do and you have the opportunity to make a lot of money right now.
CHECK OUT THE TRADES: Bullseye Options is on fire with 28 winners in a row. Check it out here!