This week was to be the big kick-off to earnings season, an ambitious one considering the markets had already posted double digit gains in 2013.

TOO MUCH TOO FAR?
That could be the message being sent as this week’s response has been nothing more than ho-hum. We are also finishing up an expiration and by all accounts it’ll be down.

BLEAK FUNDAMENTALS
To further complicate matters we have had poor economic data from China, Europe and the U.S., not to mention the scariness of the bombing at the Boston Marathon. A week’s full of action enough to last a year!

PLAN YOUR STRATEGY
So, as we embark on week two of earnings season, the heaviest we will see – what is the plan of attack? Normally, the charts set up nicely for a potential move but the last seven to ten days have really wreaked havoc on the technical picture.

As a stock picker, I generally will look to individual names and their technicals to get a good read on direction, time and volatility. However, when the market is making the moves we see – no rhyme or reason just plain selling – well, it’s time to step back and wait. I’ll be active next week but stepping a bit more cautiously.

TOP STRATEGIES
Times like these require patience, in addition to pulling out new tools from the trader toolbox. I’ll be looking to play strangles/straddles and spreads over the coming days as I search for the best plays during earnings. This will allow me cover to play bi-directional and/or limit risk.

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