Nike Beat Earnings and Dropped 10%. Here's Why.

Don here...

Nike reported earnings last night. Beat estimates by 16 cents. Stock should have rallied.

It dropped from $66 to $59 instead. Greater than the expected move. On a positive earnings surprise.

Meanwhile Micron beat earnings by $1.30 two days ago. The stock barely moved. The expected move held almost exactly.

Same market. Same week. Opposite results. Brandon Chapman explained why this morning.

Want to see how he spots these moves before they happen? Catch Brandon's latest Ghost Prints Webinar replay HERE

In today's free session replay, you'll discover:

Why option flow determines magnitude more than direction. Nike had massive put buying Wednesday and Thursday. 7,200 contracts at the $64 strike. Another 8,300 at $60. When earnings hit and the stock tipped lower, market makers had to hedge by shorting stock. That selling pressure accelerated the move beyond what fundamentals justified.
The difference between trades that move price and trades that don't. Micron saw put buying too. But the stock went up after earnings. No gamma squeeze. The puts became worthless. Nike moved in the same direction as the positioning. The puts triggered hedging. Magnitude exploded.
What the Bank of Japan statement means for your tech positions. They raised rates but gave no forward guidance. The yen collapsed. Technology rallied on relief that the carry trade didn't unwind. Brandon thinks this bounce could be temporary. The structural problems in semiconductors haven't changed.
How 20,000 contracts in a $5 stock created a 3% move in four minutes. NEXT saw massive call buying at 11:05 AM. The stock jumped from $5.16 to $5.29 almost instantly. That's gamma in action. Market makers sold those calls and had to buy stock to hedge. The console caught it happening live.

The biotech sector shows the same pattern building. Put open interest dwarfs call open interest across January and February expirations. If you're holding XBI long, Brandon recommends taking profits now. The gamma structure is stacked against you.

Brandon traded a butterfly on Nike yesterday with Ghost Prints members. Bought for 25 cents. Closed this morning for 63 cents. Some members held longer and got 80 cents. That's what happens when you see where institutional money is positioning before the move.

→ Watch Brandon explain why option flow determines magnitude, how gamma creates moves fundamentals can't explain, and what the BOJ statement means for tech heading into year end

To your success,
Don Kaufman
Chief Market Strategist, TheoTRADE

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