Apple Investors Nervous as Earnings Call Approaches 54 comments
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Individual investors have been conditioned by Wall Street big money to be extremely guarded going into Apple (AAPL) earnings calls. They have no idea what to expect. If the pattern of the last earnings calls is any indicator of what this one may portend, then they are rightfully nervous and perhaps dismayed. They are fearful that the stock will plummet 10 points, or swing violently, shaking many off the stock with big losses.
It doesn’t seem to matter to Wall Street that Apple, quarter after quarter, blows away its own conservative guidance and pumped up analysts estimates. Big money seemingly throws a blind eye to fundamental indicators like customers that crowd Apple Stores day and night, product launches that produce lines out the door, around the corner, extending several city blocks. These market mavens don’t want to hear it. Instead, they will be deftly tuned to that seemingly innocuous statement by Tim Cook or Peter Oppenheimer, that they can twist into a storm cloud, to justify bludgeoning the Apple faithful investor.
Why will they do this? Because they can. And they make money on the way down, and then again on the way up. The greater the swing, the more money they’ll make.
So, what’s the market environment like going into this earnings call? At the very large it’s not great. We’re in a Bear market, there’s no doubt there. But we’re also on the precipice of a strong Bear rally. Oil for example has dropped four consecutive sessions losing two critical support levels, first the uptrend line at 136, then second the 50-day moving average at 133.40. This is huge, as we all know that Oil has been the principle contributor to inflation, and inflation has been the primary driver of this Bear market.
Click to enlarge
Ok, so how can we be sure from a technical perspective that this drop in Oil will stick? The best way we determine that big moves have staying power is with a backtest soon after the breach. And that’s exactly what happened with Oil on Friday (July 18). After plunging through the 50-day support line, Oil made a move back up but was blanked, falling into the close and ending at 129.47 -0.71 (0.55%). That culminates a complete breakdown with a confirming backtest. Oil dropped a total of 18.47 points (12.5%) off the high of 147.90 in just a week! Wow!
Now, let’s combine this great news with a rebound by financials that was equally, if not more impressive. This rebound was initiated by great earnings from key players like Wells Fargo (WFC), JP Morgan (JPC), and the big one, Citigroup (C)! Wells Fargo even raised its dividend by 10%! That’s a slap in the face to the financial Bears. Sure, there are still going to be problem lenders out there with more write downs, but it’s obvious now that things aren’t nearly as bad as people thought, and more importantly it looks like the industry can absorb the write downs and continue to operate.
We’ve got lots of earnings news ahead of us, and key economic indicators coming up this week. So, this rally still has some hills to climb. But the momentum is clearly behind the rally. So now, Apple becomes the linch pin to propping up the Tech Sector. If Apple reports well, and the Wall Street big guys have any sense at all, then this rally will continue.
Disclosure: Long AAPL
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This article has 54 comments:
No analysis of aapl performance post-eps for any extended period of time. Just some anecdotal nonsense.
What a joke. SeekingAlpha no longer bookmarked.
Ok we have the super I phone, computers, I tunes and so on but the pipeline appears to be stalling. The last Apple event was kinda a yawner. Their business model of making niche electronics requires them to be nimble.
I am also bothered by them not trying to make penetration into the business sector in a big way.
The last big question is the health of it's CEO?
Looking at the chart my guess is that many fund managers are backing out of this stock for these reasons.
Today some articles are back again discussing Job's health, the suggested (wanted) direction is clear.
Hope I'm wrong, but at the worst could be a nice occasion to add (in a little while), or trade it.
Please stop wasting out time
How about 10% PC market share...? then 15%... then 25%, and so on...
...and exactly OFFTHEOBT: long horizon investors have zero to fear... perhaps just some more opportunity to buy more..
You must be one of those Big Boys! Lets see, Apple's big day, stock is down to 164, Rimm is up 4% and the beat goes on! See you at 150 tonight!
Electronic trading has made people careless, greedy and, quite honestly, stupid.
Apple constantly wins award, around the globe for innovation and has a huge, brilliant R & D staff and LOTS of $. even if eventually Jobs is gone, Apple is here to stay and will continue to innovate and make more $. This is not Microsoft which took 7 years to develop a bad product.
Perhaps you can join Peter O. tonight and share your pearls of wisdom with him as he sandbags guidance? Then you can thank him for having the stock tank to 150 and assure him you will be buying more. That would be a brilliant conversation among two Apple deadheads.
Big run up into earnings! Down to 163 while RIMM is up 4%. Stay smart friend.
Nevertheless, I do think Apple may trade to mid 150s on anything less than 1.20 at which point I plan to add to my position. If I am wrong, then great news all around as I'm sure it will lift the tech sector and hopefully my other tech positions.
I was referring to 1.20 for the current Q. Guidance and most of the street is at 1.13 (even though first call is 1.08) but the analysts still like to see what % the company beats by relative to prior beats. Its an absurd metric but many analysts report on it. Having said that, i think the weakness over the past few days take away a lot of that risk such that something in the 1.15 range will probably be just fine. As for guidance, that is always a risk with this company - I read somewhere that one analysts is expecting a guide to about $1.00 which is well below consensus. How its received initially is anyone's guess but if we do get a retest of the post Q1 eps low (155 i think) I am a buyer.
Nokia told the world that the iPhone would never make it, the phone market is too complicated for a would be interloper. Now, Nokia's CEO is scared shxxlexx, scrambling to acquire competency in operating systems, and scrambling to integrate technical forces into something he "hopes" will compete with Apple.
The iPhone results will not be part of today's report by Apple. You can read why elseshere.
I have to laugh also about the RIMM "experts" - all smiles about the next model, to have "touch screen" technology, knowing that they won't ever have - at least for years - the multi touch Apple technology - which is extensively not only patented but is copyrighted. Copywrites do not expire. And, yes - you can Copyright (takes a long time and much effort) a technology just as Apple Copyrighted the iPod look and the navigation wheel. The Copyright is the killer deterrent to would be "me-too" copiers.
The next quarter report will have the iPhone results.
JW - these negative looney critics don't own any stock. Just lurker tramps, hoping to stampede a sell. Their views, if they really believe them, are at the very fringe of the probability bell curve. Right where they belong. At the fringe.
return, 2. stops the shorts/hedge funds from repeating becuase they know these great companies won't stand for it. Then we have Apple, the most attacked company on Nasdaq open for shorts/hedges anytime to do with as they please. It's like the whore of Nasdaq. Apple gets murdered but is too stupid enough to do anything about because they have Peter O. sitting on his $17B and he's rather ensure it sits in the bank as opposed to being used as a competitive weapon against manipultative attacks. Sad, but true...
I love the inclusion of Potash along with blue chips IBM and GE. GE wasnt taken down? I remember it being taken down 20+% in one day in April. Further eveidence that seeking alpha needs an ignore button.
Cfr. my previous post.
After hours 158. The 70% probability turned out as very real.
Thank you.
Ben, I'll enjoy watching you lose money on your AAPL short."
signed by JW, PhD.
seekingalpha.com/artic...
I enjoyed that me too!
signed by JW, PhD.