|
Probability Trader Pro
Daily News Brief
Wednesday, October 28, 2026 · Odds as of Tuesday's close
Stocks rose on Tuesday, but this morning's odds moved the other way: all three big index funds are lower than they were yesterday. Today's free pick is a company that just paid off a large chunk of expensive debt, and the Federal Reserve announces its rate decision this afternoon.
Today's free pick: GEO
Our model gives The GEO Group (GEO) a 77.3% chance of closing higher five trading days from now. That clears Gate 1, our 75% line. GEO runs secure facilities, processing centers and reentry centers under government contracts, and it closed Tuesday at $28.27.
One thing to know up front: yesterday morning the model had GEO at just 36%. Tuesday's trading moved it to 77%. That is a big one-day jump, and we would rather tell you that than hide it. The model matches recent price behavior against years of history, and the pattern it now sees has usually been followed by a higher close a week later. Whether that holds is exactly what the five-day window will tell us.
The current-events review turned up a clear story, all from the company's own filings. On October 5, GEO completed the sale of its three Adelanto, California facilities to the Department of Homeland Security for $950 million (about $705 million after taxes and fees), and it keeps operating them under its existing contract. On October 15, it used that money to pay off all $650 million of its 8.625% notes due 2029. At that interest rate, the payoff removes roughly $56 million a year in interest. The company also extended its $550 million credit line to 2031, with nothing drawn on it, and raised its share buyback authorization from $500 million to $1.25 billion.
In plain words: less debt, lower interest costs, and more room to buy back stock. The market has not rewarded the news yet; the stock is a few dollars below where it traded in early October. Two things to keep in mind. GEO's business depends on federal policy, which cuts both ways. And GEO reports third-quarter results on Thursday, November 5, before the market opens, the morning after our five-day window closes on November 4. The window ends before the earnings risk begins, which is on purpose.
Is it a sure thing? No. A 77% probability means that roughly one time in four, a stock in this pattern has closed lower. We'll look back at how GEO 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 yesterday morning.
- Big tech (QQQ, Nasdaq 100): 65%, down from 91%. Still leaning higher, just much less strongly.
- Small companies (IWM, Russell 2000): 63%, down from 74%.
- Broad market (SPY, S&P 500): 31%, down from 47%. Now leaning lower.
How can the odds fall on a day the market went up? The models do not score yesterday's gain. They compare the last few weeks of price behavior with years of history, and the pattern they see after Tuesday's rally has been followed by a higher close a week later less often than Monday's pattern was. That is a reading of history, not a prediction about today.
The equal-weight S&P 500 fund, where every company counts the same, slipped from 50% to 38%. The typical company now leans lower too.
Under the hood
Across the 280 stocks we follow, the mood cooled. 58 are at 75% or better (59 yesterday), 66 lean mildly higher (81), and 156 lean lower (140). The average stock sits at 49%, down from 51%.
There was a lot of movement underneath: 62 stocks gained at least 10 points of odds in a single day and 80 lost at least 10.
Among the sector funds, the biggest drops were communications (XLC, 98% to 76%), homebuilders (XHB, 44% to 23%) and gold (GLD, 84% to 66%). The biggest gains were industrials (XLI, 56% to 71%) and health care (XLV, 36% to 46%). Technology (XLK) rose to 99%, even as the big-tech fund fell to 65%; each fund has its own model, built from its own price history, so they can disagree. The energy fund (XLE) fell to 12% with oil above $115. The models read how prices behave, not the headlines.
The news
A memory-chip blowout
South Korea's SK hynix, which makes the high-bandwidth memory that goes into AI chips, reported record quarterly results overnight. Revenue passed 100 trillion won (about $75 billion) for the first time, operating profit rose more than sixfold from a year ago, and the company said it expects memory demand to exceed supply through 2030. U.S. chip stocks, led by memory maker Micron, rose in premarket trading.
Why it matters: the spending on AI data centers is still showing up in real company results. Tonight's reports from Microsoft and Alphabet will tell us whether the buyers of all that hardware are still spending.
Earnings: a record from Visa, a weak quarter at Enphase
- Visa (V), Tuesday after the close: revenue of $12.1 billion, up 13%, with payments volume and cross-border spending both strong. It raised its dividend 16%.
- Enphase (ENPH), Tuesday after the close: revenue of $293 million, down from $410 million a year ago, and a forecast of $225 to $255 million for the current quarter. The company makes solar microinverters and batteries for homes.
Why it matters: consumers are still spending (Visa), while home solar demand keeps shrinking (Enphase). Strong results do not guarantee a higher stock, and weak ones do not guarantee a lower one, which is why the odds and the news are separate gates.
Oil back above $115
Yemen's Houthis said Tuesday they hit Saudi Arabia's largest refinery, Ras Tanura, with a missile. Saudi authorities had not confirmed damage this morning. Brent crude, the global benchmark, rose to about $115 to $116 a barrel after falling nearly $2 on Tuesday, when peace talks had eased supply worries. High oil helps producers and hurts airlines and cruise lines.
The Fed decides today
The Federal Reserve announces its rate decision at 2 PM Eastern (11 AM Pacific), with Chair Kevin Warsh's press conference at 2:30. Its key rate sits at 3.75%–4.00% after a quarter-point increase in September, and futures markets put the odds of no change today at roughly 90%. What traders really want is a hint about December.
Still ahead this week
- Tonight: Microsoft and Alphabet (Google) report after the close.
- Thursday: the first estimate of third-quarter economic growth (GDP) and the Fed's preferred inflation measure, both before the open. Eli Lilly, Mastercard and Merck report in the morning; Amazon and Intel after the close.
- Friday: Exxon and Chevron report.
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.
|
