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Friday's a big day for the banks (three, specifically) because earnings come out before the markets even open.
The pundits are already calling for weak earnings numbers for all three, largely due to the Fed's decision against raising interest rates.
Now, whether or not they're right is anyone's guess – at least, until Friday.
But you don't have to wait until then to get a read on how much these big banks' stocks will move…
There's a simple method you can use to predict the price movement of a stock before its earnings even come out.
And it's as easy as this…
How to Secure Profits Ahead of Wells Fargo, JPMorgan, and Citibank's Big Earnings Announcements
And while all the analysts in the world can offer their insights and projections of how each one will do, there's always the chance of a major earnings "surprise" – both good and bad.
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That's why many traders consider earnings season to be a gift or a curse.
If you're on the wrong side of your trade, you could be looking at thousands of dollars in losses. But if you're on the right side of your trade… your profit potential is virtually endless.
Now it can be nearly impossible to know what each one's earnings per share (EPS) and revenue numbers will be before they come out. But you can predict the percentage points that their stocks will move within the week following earnings.
Take a look at the earnings records for WFC, JPM, and C over the last seven quarters…
You can see that C has slightly outperformed WFC and JPM, with six earnings beats and one miss, compared to their five earnings beats and two misses.
When you drill even deeper into the data, you can actually see what the percentage moves were pre- and post-earnings. But just because a company has beat its earnings expectations the majority of the time (like C) doesn't actually mean the stock will trade higher.
And here's proof…
In the chart above, I've highlighted (in the blue rectangles) the percentage loss in the stocks' values the last four earnings quarters in a row. And the average moves WFC, JPM, and C made tell a different story than their earnings records.
Above, you'll see a column called "Best of Close BED AED Earnings Changes," which shows the best individual stock changes after earnings are announced (rounded to integers and using the most recent first high and low stock prices). This data gives you a read on the percentage price change of a stock after every earnings report. And that will help you gauge which direction any stock will move after earnings come out.
Now this data specifically comes from my proprietary tools, but you can use any financial or earnings website to find the earnings record and best individual stock changes post earnings.
A Unique Strategy to Predict (and Profit from) Any Stock's Price Movement Post-Earnings
About the Author
Tom Gentile is one of the world's foremost authorities on stock, futures and options trading.
With more than 25 years' experience trading stocks, futures, and options, Tom's style of trading systems and strategies are designed to help individual investors propel themselves past 99 percent of the trading crowd.