Sizing Up Two Big Financial Earnings

Two huge earnings announcements are coming tomorrow, from JPMorgan (JPM) and Wells Fargo (WFC). I do believe that what they say will be enough to give the markets a bit of a jolt in either direction, but only if they say the same thing. Unfortunately, their charts aren't saying the same thing at this moment. 

JPMorgan has the stronger of the two charts, with a bullish cup-and-handle pattern breaking out today and pointing to upside in the $44-$45 area. If it were not for earnings, I'd be a definite buyer of this chart today. The current lower high in stochastics and the relative strength index (RSI) have me a bit concerned. Still, if I were to play one of these long into earnings, my choice would be JPMorgan through an Oct 12 $42-$43.5 call spread or $42-$44 diagonal call spread, using the October 19 $42 calls long and October 12 $44 call short. However, my approach will be to buy the October 19 $42.50 straddle and sell the October 12 $43.50 call/$41.50 put for around $1.55 to $1.57....262 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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