Earnings Blast Off: Signs of Recovery On the Way
We’re in the midst of earnings season and things have been looking very good for many companies. So far, over 88% of the companies that have already reported have far exceeded Wall Street analyst estimates (CNBC.com). The U.S. and world economy seems to be snapping back to pre-pandemic levels of growth. The United States has largely reopened and most corporations have benefited from a massive increase in productivity from the digital transition which was sped up by the pandemic.
Before we start our deep dive into the earnings season and markets, let’s cover the indicator of the month.
Our Featured Indicator of the Month: Moving Average Convergence and Divergence (MACD)
What is the Moving Average Convergence Divergence (MACD)?
MACD is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. The MACD is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA. (Fernando, 2021). Traders use the MACD as a trend following filter and a decision support tool to stay in trades longer while trading.
Back to the Markets
With earnings reports exceeding Wall Street’s estimates it makes sense that the $SPY and $DIA, which track the S&P 500 in the Dow Jones industrial average, are both near all time highs.
The $SPY has been rising for the last few weeks. You will notice above on the $SPY chart that the MACD Signal Line has crossed over, indicating that the market might be ready to move lower; at least for the short term.
$GBTC, which represents the bitcoin tracking stock, has pulled off its highs as bitcoin has finally started to cool off. You can clearly see that MACD has turned negative and the MACD Signal Line in pressing to new lows.
Let’s look at earnings winners and losers; Netflix ($NFLX) has finally missed on earning expectations due to a slow down in subscriber growth. This is understandable due to the massive growth of Netflix subscribers who joined during the pandemic lockdowns.
Amazon ($AMZN) has had an exceptional increase in earnings as the economy starts to recover and people are starting to spend some of the money that they saved during the pandemic. This has been reflected in its earnings; as seen from the chart above, it is near multi week highs.
This month check out great insights into technical analysis in our upcoming blog https://learningdaytrading.com/blog-daytrading/.
Fernando, J. (2021, April 29). Moving average convergence divergence (macd) definition. Retrieved April 30, 2021, from https://www.investopedia.com/terms/m/macd.asp#:~:text=Moving%20average%20convergence%20divergence%20(MACD)%20is%20a%20trend%2Dfollowing,from%20the%2012%2Dperiod%20EMA.
Market Research and Analysis provided by Michael DiGioia, Director of Educational Services
What’s New from DAS
We released a new production version during the month of April: 126.96.36.199. This version includes an extensive list of enhancements and bug fixes to the DAS Trader Pro platform:
-Added range selecting alerts and delete (if ctrl+left click to select multiples, then all those in between will be deleted).
-Extended toolbar button script and hotkey window script length.
-Added hotkey “Goto hh:mm:ss” for quote replay for any time increment.
-Changed Market Viewer window Autofit to expand to fill empty space.
-Added quote size highlighting feature to Montage Level 2 window.
-Added HideTrendline hot key to hide trend line.
-Added options account risk ctrl parameters.
-Added “InSrc” to admin order window for order entry source.
-Options chain window: Improved loading speed.
-Options chain window: Added back level 1 font color.
-CMD API Changed to not sending level1 right away after subscription because current lv1 could be old data.
-CMD API bug fix: tms crash.
-Batch short locate: Added error message display if there is any error.
-Quote Replay: Adjusted to make time sale more smooth.
-Basket order bug fix: “*” was loaded as position for share column from file.
-Basket order bug fix: DAY saved to IOC.
-Fixed montage hightlighting market maker error
-Fixed Montage level 2 window scroll flickering bug.
-Chart order bug fix – Share=pos is not working if pos is short pos.
-Chart order no longer support Share=Bp script.
-Bug fix – pivot point label color overwrote by other studies.
We highly recommend that you review the release notes here.
Please be sure to install the latest version of the DAS Trader Pro platform. You can do this very easily from DAS by clicking Tools > Auto Upgrade. You can learn more about the Auto Upgrade feature in our Knowledge Base.
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New Videos Coming Your Way!
We are very excited to announce the release of our newest video series: Advanced Chart Indicators & Configuration. The first video will be available on our DAS Trader Pro YouTube Channel this Friday (5/7). Follow us on social media, @dastrader, for reminders about all of the new video releases for this exciting new series!