EarningsBeats Digest

Published: Fri, 07/16/21

EarningsBeats.com Digest for July 16, 2021

Dear Digest Subscriber,

Save the date for these upcoming webinar events:

Model ETF Portfolio

Monday, July 19th at 5:00pm EST

Join EarningsBeats.com's Chief Market Strategist Tom Bowley as he reveals the next batch of ETFs hand-selected to outperform the S&P 500. Tom will discuss his strategy in selecting and weighting the various ETFs to maximize their cumulative return.

This is a members-only event. To receive access to the event, click the button below.

Q2 Earnings

Tuesday, July 20th at 4:30pm EST

Join Tom Bowley as he points out the best quarterly earnings reports to date and then uses both absolute and relative strength indications to uncover those companies most likely to report blowout results throughout the balance of earnings season. This is a very popular quarterly event that you don't want to miss.

This is a members-only event. To receive access to the event, click the button below.

Join 30-Day Trial

Historical Headwinds Are Approaching

We know that options expiration week can be volatile and subject to quite a bit of whipsaw action. July monthly options expire today and we've been witnessing what can happen when there are a large number of net in-the-money calls where traders are banking on higher prices. And July can be particularly difficult. Next week is one of the worst weeks of the year, based on seasonal patterns. Since 1950 on the S&P 500, here are the annualized returns by calendar day:

July 18: -27.97%
July 19: -0.66%
July 20: -11.02%
July 21: -40.31%
July 22: -11.98%
July 23: -35.00%
July 24: +4.99%

Every single day is below the S&P 500's average annual return of approximately 9% and many of them are way below this average return. I believe it's the combination of two things. First, this period tends to fall right around options expiration Friday and, second, earnings season has kicked in. History tells us that the stock market tends to operate on a "buy on rumor, sell on news" mentality. July has a past that underscores this mentality. The July 17th close also begins what has been the worst seasonal period of the year, which runs from that date through the September 26th close. We don't always go down, so don't misinterpret what I'm saying. But historical odds definitely favor the bears as we move deeper into the summer months.

Happy trading!

Tom Bowley

Chief Market Strategist

EarningsBeats.com
Better Timing. Better Trades.