How Have Things Gone with Earnings So Far This Year?

Tom Gentile

Posted in
Newsletter

By: Tom Gentile
February 21st, 2024

4 mins read

Originally published via our newsletter previously. Subscribe for early access!

I get a lot of my earnings updates each quarter from a website called FactSet and the author of said earnings data is from VP Senior Earnings Analyst John  Butters.

A couple of points I read are Q4 2023 thus far has seen 67% of S&P 500 companies reporting actual results) of which 75% of those reported a positive EPS surprise and 65% of S&P 500 companies have reported a positive revenue surprise. 

As for eps growth, the blended (year-over-year) earnings growth rate for the S&P 500 is 2.9%. The data shows that is if that growth rate remains steady for the quarter it will be the second-straight quarter the S&P 500 has reported earnings growth.

We had inflation numbers that were hotter than expected this week, which caused a hiccup yesterday in the markets, but earnings have come in well and that may keep things from dropping too much.

Tom Gentile
C1P: Chief 1-Percenter


Market in Focus: XLK – SPDR S&P 500 ETF Trust

XLK Percentage Gains in the Last 6 Months
XLK Percentage Gains in the Last 6 Months

For reasons I elaborate on in the Tools and Observations section for this weeks newsletter, the XLK is my sector in focus.

This is the sector ETF for stocks in the Technology Sector.

It encompasses stocks in all subsectors of Tech, such as Computer Hardware, Semiconductors, Communications Equipment, etc.

Of one wants to just trade options on the ETF itself, XLE does trade options.

I will offer up education below on how I take stocks from bullish sectors of the market, such as tech and then look to my seasonal analysis and seasonal scanning tool Money Calendar to find bullish patterns on stocks in this sector I may want to then consider a bullish option strategy on.

Tools and Observations

As stated in the Market in Focus panel of this newsletter, Technology is a leading corner of the market based on percentage gain of the Technology ETF, the XLE.

When I am analyzing stock in Money Calendar looking for a bullish pattern with a 90-100% success rate, meaning it has traded higher 9 or 10 of the last 10 years, one additional filter I use is if the sector has bullish momentum as well.

I get that sector view and data from a website called www.sectorspdr.com.

Sector Tracker
Sector Tracker

I use what is called the Sector Tracker and I set it for any number of days range, mostly I use a 3 month or 6-month lookback.

When I bring up the list and performance of the 11 SPDR sector ETF’s I get the above results.

The Technology sector ETF , XLK has the best percentage gain at 21.49%.

The Magnificent-7 stocks I’ve written about lately are a large reason for overall market performance reaching recent all-time highs. Most are in the XLK as well and could be the biggest reason for it being the top performing Sector SPDR ETF.

When I then go to Money Calendar I am now keeping an eye out for any of these stocks from this ETF’s holdings to also be in the Money Calendar data.

I am not looking just for any of the Mag-7 stocks. Any of the stocks in the XLE are fair game.

The key is they have to make the qualifying parameters of a stock (or ETF) I would consider worth then going in to my options analysis on. You can do a search on the holdings in the XLE on this stie or run a  search on www.etfdb.com.

Remember what I am looking for on my Money Calendar candidates.

I want to see a 20-30-day pattern. Bullish move. Positive Power Meter.

Last loser 3 or more years back. An avg. price move 3-points or higher, (either over the past 10 years or over the past 3).

There aren’t too many bullish Money Calendar patterns in the recent Money Calendar data results list.

I did end up finding one to highlight for educational purposes with a start date of February 20, 2024.

The Money Calendar
The Money Calendar

It is a 21-day bullish pattern with a positive power meter and a last loser 4 years back.

The Avg. Price move over the past 10 years is only $1.15, but the avg. price move over the past few years is in the 7=point range.

Image 26
Image 26

It’s at this point I would take the current or close price and add that to the avg. price move to establish an anticipated price point.

I would then move on to see if there is an option long call or Call Debit Spread that has the chance to double if it makes that anticipated target price.

Tom Gentile
C1P: Chief 1-Percenter


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