Apple Investors See End to Bear's Bite

Last week the markets definitely turned a corner, and the Wilderness investors maintained a cautious stance. But the last few trading sessions have exposed a new found internal strength to this market. Has the Bear lost its bite? Well it seems there’s a massive rotation out of commodities and Oil and Financials and Tech are the main benefactors.

There’s still gobs of pessimism out there, with a bull-bear spread at extremes rarely seen. And today, after an initial surge and over bought conditions, most would not have been surprised if we experience a hard decline. That’s what normally happens in Bear markets. But it never came. Instead the markets held fast, and even demonstrated strength into the close.

Apple (AAPL) was exceptionally strong yesterday, finishing at 166.26 +4.24 (2.62%), that’s nearly 20 points higher than the post-earnings decline! There was definitely trepidation mid session as AAPL ran into resistance off its initial surge, but it held fast and like the broader markets it showed good closing strength. The resistance coincided with the S&P as it approached 1288, which represented the 60 minute charts 200-day moving average and price resistance from earlier in July.

So, tomorrow that’s the next challenge in this recovery, to break free from the 200-day moving average and attack the 1300-1305 range which should prove quite formidable. This corresponds to the 2360 gap on the Nasdaq from late June. With AAPL we’ll need to contend with gap resistance at 172.50. I believe we have a good chance to achieve these objectives. We have good momentum, and extreme pessimism on our sides.

Stock Position: Long AAPL.

Comments

[Murphy Mac:]

I can't believe people put so much energy into charts like that one. What happened to past performance doesn't indicate future results?!
All it takes is one major announcement - like Boot Camp - and the chart means NOTHING.

2008 Jul 24 08:14 AM

[tom1234:]

how much more did aapl make over it's reportings --forget the acounting to spread earninge over 2 years

2008 Jul 24 09:23 AM

[Constable Odo:]

Big deal. Apple is exceptionally weak today and getting stomped all over by Amazon. Yes, you mention this is a bear market, but obviously someone forget to tell Amazon. I thought that Apple was supposed to be the retail champion. I guess the crowds in Apple's brick and mortar stores are just hanging out and not buying anything.

Daily charts mean next to nothing when it comes to Apple's share price. As long investors we all believe/agree that Apple's stock will get it's just due someday, but for now it's mired in mud and no one is able to see exactly when this is going to change. Sometime in the future is a bit vague.

2008 Jul 24 12:11 PM

[Neil Anderson:]

"I guess the crowds in Apple's brick and mortar stores are just hanging out and not buying anything."

That's because Apple sold all its inventory and is waiting for more. I think I'll go line up so I'm ready for their next product announcement.

2008 Jul 24 01:24 PM