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Probability Trader Pro
Daily News Brief
Tuesday, October 27, 2026 · Odds as of Monday's close
Monday's trading pushed the odds for the three big index funds in different directions, and a busy morning of earnings brought mostly good news. Today's free pick comes with a lesson in why we never rely on the odds alone.
Today's free pick: CLS, and why the odds weren't enough
Our model gives Celestica (CLS) just a 4.3% chance of closing higher five trading days from now. That's very low, and the chart shows why: the stock slid from a close of about $388 on October 6 to around $250 by Monday, a drop of more than a third in three weeks.
That is the model doing its job. It learned from years of price behavior, and the pattern CLS was in has rarely turned around within a week. The odds are Gate 1 of our four gates, and CLS did not pass it.
But the model only sees prices. Monday's odds were computed from Monday's close, and Celestica reported earnings after the close: third-quarter revenue up 83% from a year ago, a raised 2026 forecast, and a first look at 2027 of about $40 billion in revenue, roughly 90% growth. No price-based model can know about news that hasn't reached the price yet.
That is what the other gates are for. The AI current-events review flagged the report overnight, and the final human review weighed it against the odds and the chart. This morning CLS is trading well above Monday's close. We chose it today on purpose, as an example of news arriving after the odds were set.
Is it a sure thing? No. Strong news can change a stock's direction, and sometimes the selling resumes anyway. We'll look back at how CLS did once the five days are up.
The odds this morning
After every close, our models update the odds that each fund will be higher about a week from now. A 50% reading is a coin flip. The dots show where each fund stood on Friday, the numbers in Sunday's Probability Outlook.
- Big tech (QQQ, Nasdaq 100): 91%, up from 83% on Friday.
- Small companies (IWM, Russell 2000): 74%, down from 94%. Still leaning higher, just less strongly.
- Broad market (SPY, S&P 500): 47%, down from 64%. Now just under a coin flip.
How can big tech lean strongly higher while the broad market sits near 50%? Each fund has its own model, built from its own price history, so they don't have to agree. When they split like this, the market hasn't picked a direction yet.
One change from Sunday's letter stands out. The equal-weight S&P 500 fund, where every company counts the same, rose from 23% to 50%. On Friday the typical company leaned lower; this morning it's a coin flip.
Under the hood
Across the 280 stocks we follow, the overall picture barely moved: 59 are at 75% or better (64 on Friday) and 140 lean lower (139). The average stock sits at 51%.
Beneath that calm surface there was plenty of reshuffling. In a single day, 59 stocks gained at least 10 points of odds and another 59 lost at least 10.
Among the sector funds, the biggest gains were in biotech (XBI, 60% to 80%) and financials (XLF, 59% to 76%). The biggest drop was consumer discretionary (XLY, 82% to 58%). The energy fund (XLE) is still low at 22%, even with oil above $115. That's a good reminder that the models read how prices behave, not the headlines.
The news
Earnings: beats and raised forecasts
- Cadence Design Systems (CDNS), Monday after the close: revenue of $1.63 billion, up from $1.34 billion, and a higher 2026 forecast, now about 21% revenue growth. Cadence makes the software used to design computer chips.
- Coca-Cola (KO), this morning: revenue up 7% to $13.4 billion. It raised its full-year outlook and now expects comparable earnings per share to grow at least 11%.
- UPS, this morning: revenue of $22.9 billion, up 6.7%, and a higher full-year forecast.
- Royal Caribbean (RCL), this morning: profit came in better than its own guidance, and it raised its full-year earnings forecast. It also said higher fuel costs ate into part of that improvement.
Why it matters: along with Celestica (above), AI hardware and chip-design companies are still growing fast, and everyday-spending businesses like soft drinks and cruises are holding up. Fuel is the cost to watch.
Dollar General sued over prices
The Federal Trade Commission and 20 states sued Dollar General on Monday. They allege that customers were routinely charged more at the register than the price on the shelf. These are allegations, not findings; a court will decide.
Oil stays high
Brent crude, the global benchmark, was near $116 a barrel this morning, and U.S. crude near $102. Talks in Tehran between Iran, Saudi Arabia, Turkey and Pakistan raised hopes of easing tensions. But renewed Houthi attacks kept prices up, and October has been the worst month for attacks on shipping near the Strait of Hormuz since tracking began in 2017. High oil helps producers and hurts airlines and cruise lines.
The Fed decides tomorrow
The Federal Reserve meets today and announces its rate decision Wednesday. Its key rate sits at 3.75%–4.00% after a quarter-point increase in September, and markets put the odds of no change at about 90%. The bigger question is what the Fed signals about December.
Still ahead this week
- Wednesday: the Fed decision. After the close, Microsoft and Alphabet (Google) report.
- Thursday: the first estimate of third-quarter economic growth (GDP) and the Fed's preferred inflation measure. Amazon reports after the close.
Probability Trader Pro publishes probability research for education only. It is not investment advice or a recommendation to buy or sell any security. Probabilities are projections from historical data; they are not certainties. Company figures are from the companies' own releases.
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