The first day of the month is often the most bullish day of the month, but not so for August! The seasonality here, however, diverges for small caps vs. large caps.
Large caps are typically down, while small caps are up. August can be the worst month for the large caps, on both the Dow and the SPY. So if you were looking for an opportunity to take a bearish position, August 1 is a good entry point. You can use a short position on DIA or SPY as a simple hedge that can protect you against a market correction or crash.
Earnings on Tuesday: FIT, PFE, CVS, PG, and EA. Be careful here, as guidance with Fitbit is way more important than an earnings beat.
Earnings from DDD, SQ, and TSLA but Tesla is the one everyone will be watching. The analysts are notoriously bad at predicting TSLA’s beat/miss and how the stock acts afterward. The company has missed the last three quarters. On Monday TSLA officially announced its merger with SCTY and this could override the impact of an earning beat or miss.
Earnings from PCLN and LNKD highlight the earnings for today. Earnings season is winding down and most of the big names investors are interested in have already reported by now.
CTRP, CTSH, and JD are reporting. Overall, do not expect much bullish action this week. The market will likely move sideways or slightly downward and this makes earnings trades, theta trades, and sideways trades good options.