Print the page
Increase font size

Posted January 19, 2021

Scott Stewart

By Scott Stewart

Predicting a Big Earnings Play Winner!

Welcome to the Rude Awakening for January 19, 2021

Were looking at a shortened week, with markets being closed yesterday in honor of Martin Luther King, Jr.

Recording before market open, markets are looking to open strong today, reaching back for recent all time highs.

All technical indicators imply we are looking at an overbought market, but the market continues to push higher.

Kicking Off Earnings Season in Earnest

We are back in the swing of another new earnings season, folks.

The bank stocks are leading the way.

But, the big one for today is Netflix (NFLX).

Reporting after market close today, were looking at options with a 7.9% implied move. This is quite a bit higher than what we typically expect from NFLX upon earnings normally its a 3.3% move.

The at the money options on NFLX show implied volatility of 90%. If you remember one of our early lessons on options, you know that anything above 50% makes it a good juicy premium for an options play. So this one is something of an options traders dream!

We predict earnings will either meet or beat expectations, and so wed look to do a bullish play using options on NFLX.

Some More Bulls on Our Watchlist

Like I said, bank stocks are leading the way this earnings season.

One to watch is Morgan Stanley (MS), projected to open nearly 2% higher this morning. They will be reporting before market open tomorrow, and its showing a 4.4% implied move. The stock is currently priced to perfection, after its recent runup. We might look for a pullback on MS before a potential buy.

U.S. Bancorp (USB) is also reporting tomorrow morning, and in this one we are already starting to see a bit of a pullback. USB is showing a 3.7% implied move pending earnings.

Last but not least is Bank of America Corporation (BAC), which reported earnings this morning and has beat expectations by 2 cents. Even still, its down a little over 50 cents in the premarket, with bearish indicators. We are expecting a pullback to the $30 level.

Lots of activity coming your way this week, folks.

Well continue to find you winners as earnings season continues to ramp up.

Have a great trading day.

Well talk tomorrow!

Regards,

Scott Stewart

Scott Stewart

Editor, Rude Awakening

Pardon My Financial French

Pardon My Financial French

Posted October 02, 2026

By Sean Ring

Jeff spotted an omission. Girard spotted another risk. Willy spotted a sentence that should never have escaped my keyboard. Today, I’m opening the mailbag… and doing a little translating.
For Whom the Debt Tolls

For Whom the Debt Tolls

Posted October 01, 2026

By Sean Ring

Washington has spent years ordering the lobster and telling everyone the bill was manageable. In September, the waiter finally arrived. With the 10-year Treasury yield at 5.29%, small companies, landlords, and supposedly safe bond portfolios discovered whose credit card was on the table.
Spend It Like You Stole It

Spend It Like You Stole It

Posted September 30, 2026

By Sean Ring

The Swamp’s year ends tonight. Yours could get interesting depending on where the money lands.
The Pentagon’s Velvet Rope

The Pentagon’s Velvet Rope

Posted September 29, 2026

By Sean Ring

Every good nightclub has two things: people with money and a bouncer deciding who gets in. The Pentagon has an enormous amount of the first. Congress has been working on the second. And a handful of mining and manufacturing companies could find themselves inside a very profitable party.
From Athens with Contempt

From Athens with Contempt

Posted September 28, 2026

By Sean Ring

America spent decades convincing other countries that its friendship was worth having. Then its ambassador to Greece allegedly explained, over dinner, that their governments were replaceable. Beijing couldn’t have written a better sales pitch. And it didn’t even have to pick up the check.
The Lost Round Trip

The Lost Round Trip

Posted September 25, 2026

By Sean Ring

In 1884, a dollar bought roughly what it had bought before the Civil War. Try imagining that today: twenty years after a 75% inflationary surge, the price level had retraced the entire move. America once had inflation that went away.