Benzinga's Options Outlook for the Week of July 29: Earnings Leave Markets in Odd State

Markets have been in an odd state as so many earnings were reported last week. As mentioned in previous posts, it's important to stay ahead of the curve and not with the herd. Playing in front of earnings has shown to be high risk lotto picks at best. Many post earnings movers have been great for outright put and call buyers, via Facebook FB, Amazon.com AMZN, even some of the smaller names as well. Markets could very likely take the S&P 500 SPY up to 170-171 area post earnings with the last bit of retail buyers jumping in. Traders can see players bidding up both calls and puts to catch the move higher as well as protect from any downside. Best risk/reward is to sit on your hands or even nibble some puts, as so many stocks have been bought up 200-300 percent in recent months. Buying higher is very difficult. Let there be consolidation or let there be fade! Be prepared and trade your plans and stops accordingly. Breakouts and breakdowns have not been working and many traders will burn accounts over trading this type of action. Check out the video below for a recap of this week's options outlook: