Now What for Apple Investors? 43 comments
-
Font Size:
-
Print
- TweetThis
My last four blog posts have been dedicated to warning you all of this event. I hope you all listened and took action. So now, the big question is, where do we go next. What should we expect?
Let me start by commenting on how interesting it is that the Fed decided to not interfere. If this is their policy going forward, the market is not going to like it, because it is fraught with uncertainty. The market hates uncertainty.
But don’t think for a moment that they’re not trying to figure out how to put the brakes on what’s coming next. And just what is that, you may ask? A complete market breakdown, spurred by the fall of AIG (AIG). S&P/ Moody’s downgraded it this evening. AIG needs to cough up $100 billion to stay solvent. In my opinion, this carries far more risk than Lehman (LEH), as AIG dwarfs Lehman and Merrill (MER) combined in market influence.
So, what is the Fed going to do about it? That’s assuming that they can do anything about it. Well, don’t be surprised if they come out with a huge rate cut. My guess is 100 basis points. And will that save us? It might. But it will have to be followed up with assurances that all the other financials that are on death’s doorstep won’t meet the same fate as Lehman.
In the mean time, as investors and traders, we need to know what ammunition we have at our disposal. That is, what kinds of market action can we expect and what are the levels of support that might provide some cover for our positions? Well here they are:
First of all, let’s be clear. We lost all our major support levels in the indices that matter to us. The Dow lost 11,200, the S&P lost 1200, and the Naz lost 2200. What will likely happen next is a backtest of these levels. Investors are going to see if these former levels of support are now levels of resistance. If the markets fail the test and fall back, then we need to concern ourselves with the support we have underneath. Well, the Dow has weak support at 10,800 and then much stronger support just under 10,000. The S&P has major support at 1150, and the Naz has weak support at 2000. Let me tell you folks, I would bet the bank on those support levels. They are mediocre at best in this nasty market we’re in.
So, what about our favorite stock, Apple (AAPL)? We lost that critical 146 level with ease. Now the next level of support is big, and that’s just below yesterday’s closing price at 140. This is the gap down from our monumental January plunge. If we lose 140, then we have some support at 135, then 130. But it’s all academic at that point. If the indices lose there majors, then AAPL is going down, and the bottom is not clear. Our only hope is to backtest successfully, then hold those levels.
Stock position: Short AAPL.
Related Articles
|
Find People on SA
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largest
increase in followers
in the last 7 days-
1
David Fry
-
2
Philip Davis
-
3
Bill Gross
-
4
Tyler Durden
-
5
TraderMark
Fastest Climbers » -
1
-
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most activeSee all
Instabloggers.
Top Instabloggers » -
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 43 comments:
Why do all you fanboys come on here criticizing him every time? You guys hate dissenting voices. Just stay away from this blog if it bothers you that much.
You also have the mistaken notion that AAPL should be performing well in this market. It's a consumer stock, and things just don't look good for the consumer right now, in case you hadn't noticed. So stocks like this pay for that.
Kevin
20smoney.com
"Attenuation"
Symmetric.
Triangle.
Trenline high 202 - 192 - 176 - futue
Trendline low 111 - 115 - future
Apex - around 140 in the future
If Apple (company) doesn't implode, AAPL (stock) breakout around apex. 2-3 months in the future.
Everyone who is sitting on cash is yelling "BOO!" Institutions are loading their guns with "downgrade bullets" and shooting each other.
Fundamentals don't matter right now, and that is the first sign for some investors to jump back in.
Personally I will not be buying anymore stocks unless we hit 9/11 lows, but I am already in more than 50%.
Your comment defines the problem exactly. And who is mostly to blame for the crazed adherence to a "free market"? Neos, conservatives and repubs. The public which supports these policies and likes the sound of "free" doesn't understand the dangers or the greed that is behind it. This country is no longer what it once was - and will probably never be again.
Oh, I'm long Apple and unhappy but I'll get over it.
There nothing wrong with technical analysis but right now? C'mon...
Secular
I love people like you. You sound like a true socialist....who is long Apple. Typical.
Another individual that relies on epithets - socialist. OOOOHHH. Scary. A socialist that owns stock. WHAT?
Jerk, do you want air-traffic control to be available? How about the police dept. Want a fire dept to fight fires? Care about a relative with a serious disease who doesn't have insurance? Will you pay? People like you say no - let em die. Ideologue.
That's the point idiot. I was pointing out that you're a hypocrite. You're also a hypocrite by criticizing me for using 'epithets' when you stated in your moronic reply to Dithers that "Neos, conservatives and repubs" are to blame for the current financial crisis not to mention you close by calling me an idealogue and a jerk. That was also the point, but again, too stupid to see the obvious so I guess I have to point these things out to you.
I also like your second paragraph where you're arguing political theory with someone that called you a socialist and said nothing else. So either you're arguing for socialism, or you're making assumptions based solely on the fact that I want you to realize what you are: A hypocrite.
Why buy right now? When is the right time to load up on more Apple shares? People were saying that Apple hit a bottom near $150, yet it continues to slide. Who knows exactly when? Maybe the stock will get down to $120 again. Is Zach wrong to say that? Do you believe he's jinxing the stock or something. I'm not happy at the Apple share price decline at all, but I think most of you should put the blame on mortgage lenders, the banks and overleveraged financial institutions. Most of those people are now paying for their greed, ignorance or deception.
Why bother to come to this site if you don't like his opinions about Apple's performance? If you all really believe that Apple is in the best position of all tech companies to turn around once the economy stabilizes, then what difference does it matter what Zach says. If you really have faith in Apple, then what he says shouldn't sway you from purchasing more shares to prove him wrong. OK, he shorts Apple to make money. I think that most of us want to make money, since that's why we're into the stock market. He can't force any of you to sell off your stock if that's his goal. If this site can really manipulate Apple stock price, then he truly has a great power.
I am an Apple fanboy and I've been using Apple products for years through good times and bad. I want Apple to make money and I'm in it for the long-term growth. I honestly believe in a good economy the share price can go over $200. Just not today or even this year. I'm not blaming Zach for this mess. I personally don't think he has enough influence over the whole market to send it into a tailspin. If I don't wan't to hear what he's saying, I won't click on the link anymore. If his view is so cockeyed, then I'd also advise the rest of you to avoid clicking on his link.
What a joke this market has become.....
You live in a dream world @Apple Heavy. If I and everyone else was in an all out effort to sell AAPL stock the net effect would be to push the price up. There are three things that move the price of any stock; market sentiment (that is the level of prevailing fear and uncertainty in the market or sector), news events that directly or indirectly affect company performance, and lastly company fundamentals. These are in order of gravitas, with sentiment having the most gravitas by several orders of magnitude over the other two.
By the way, if you really want the full Zach Effect, come to my website where I have a blog daily and have a forum where hundreds of others participate and monitor. The blog is iPhone aware.
Blog: www.zacharybass.com
Forum: www.zacharybass.com/fo...
Really! You mean the short positions are eventually closed
You cannot escape the fact that net SELLING pushes the price DOWN, and by shorting the stock, you are SELLING.
I do not leave in a dream world; I am an investor, not a trader.
If you are convinced the stock should be going down either on its own merit or because the company's performance is being affected by economic factors, you should use Put Options, and not exacerbate an already bad situation by selling securities you do not own.
did you mean "I would NOT bet the bank"? because of the mediocre supports.
-][
Well - for once we agree :)
You said:
"This economy is going to be so bleak that retailers are going to go bonkers when they see how terrible their sales numbers are going to be."
Now who has been running the economy for the last 8 years? Who deregulated the mortgage industry? Who spent $1 Trillion on a totally unnecessary war? So who do we have to thank for this Recession? The Republicans.
As for Brandon -
The terms "Neos, conservatives and repubs" are merely descriptive terms that people are usually willing to take on themselves (as I am happy to admit that I am a registered Democrat).
Your use of Socialist however was meant in a derogatory sense as a slur that basically has no meaning (basically anyone that Rush Limbaugh does not like). You are like reagan, when presented with rational arguments, you always reply with derogatory epithets, as if they are supposed to have any meaning. Simply put - you say "If you cannot disagree on a rational bases, then slur them with nasty names! Then you can ignore the point they are trying to make."
That is the Republican way. (And part of the reason we are in this mess!)
Apple is going to do fine because most purchasers of Apple products have confidence in its aesthetic, technological, and innovate goals.
All you Rightwing whiners and NeoCons blame Liberals for your own failures, but then credit yourself and your Rightwing associates for any meager successes in the economy. Now that the Bush economy is tanking so speedily, you are desperate to find some Liberal group to blame it on.
You are all about blame and victimhood while your liberal use of the free-enterprise system just means that you are so very willing to privatize any profits but then socialize any losses.
An egregious example is the nuke industry's view of the free market. It is now pushing for more nuke plants, not that any sane individual like me wants them. Yet it has no confidence that it can be profitable as a real, bona fide profint making operation. Proof is that it whined and wrung its hands to the Fed gov. that it has little confidence its own industry could achieve viability, so it asked -- and got -- federaly subsidised insurance to cover itself in the event of catastrophe over its own incompetence and that would cost over a certain amt. This is called the Price-Anderson Act.
This is but one example; This is your MO. Just face it.
Bush ushered in his bad economy and drained Clinton's surplus and he vindictivly went a big step backward by then raiding the SS Fund, and borrowing hugely to transfer wealth from the pocket of normal citizens into the vaults of the wealthy eletes with off shore accts.
If you believe that horse manure, I have some great land in Houston you might be interested in buying......
Clinton's economy(if you want to call it that) was a dot com bust. Nothing but fluff. Actually a lot of the deregulation you talk about happened on Clinton's watch, smart ass.
Can we stick to discussing Apple & not liberal drivel that seems to always come out on this blog?????
if you don't wanna discuss it - then shut up. We will all appreciate relief from your idiocy.
This mortgage meltdown has happened 7 years into the Bush administration and you STILL trying to blame the Dems????
LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL
LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL
LOL LOL LOL LOL LOL LOL LOL LOL LOL LOL
Since you wanna get personal and insulting here - you are pathetic dude!
You or anyone please explain to me what is the form of the value/money that is lost in any such situation such as the tanking Bush economy.
Let's begin at the basic level. If I say that I lost a dollar when I dropped into the manhole, say by accident, the dollar remains there. It's lost in economic sense because no one can make any use of it any longer. It's out of circulation. It's truly lost. On the other hand, if a sewer worker finds it, he has made a huge profit on his labor; All she had to do is to pick it up and put it into her pocket. It's back in circulation. This I can understand.
Then if I loan you a dollar with the expectation of return, and you do not return the payment, then I lost a dollar. On the other hand, you gained a dollar. But the money was never lost, even though I lost it, because you gained it and because the money is still circulating in the economy. In other words, the economy, as a fiscal ecosystem, is still 100% intact because the dollar is not out of circulation. We absolutely know where the money is.
In the disastrous Bush economy, news says that this or that financial institution lost money. To whom/what is the money lost, and what is the nature of that money? Is it real like gold or is it only in potential such as money that would be gained from an investment, which I would not call the most real. I do not get this part at all, you know, where Lehman Bros, for example, lost money. Is this really true money or is it an expectation of money being accrued at some time in the future but not "real" money?
now your political arguments are reduced to calling names based on absolutely no evidence. That is why we laugh at people like you.
-Chicken Little (new version)
Reagan and his ilk are snobbingly looking down at you and me, and abusing us with name calling, but this is what Rightwingers do, ad hominem and a logical fallacy because they refuse to address the issue that we raised. I expect no more from them. *S*
Regarding the economy, they refuse to face the fact that Bush ushered in Part 1 of his insane economy, then borrowed heavily to cover over the bad economic fundamentals while he enriched his oil friends and no bid contractors with the people's money and, as he leaves office, he resentfully tanks it a second time, but much worse. I have not read of a president that tanked the economy upon entering and exiting his terms. It's truly an astoundingly negative and destructive event for the normal citizen.
i agree with most of what you say. I think the really salient point here is how he "...borrowed heavily to cover over the bad economic fundamentals "
Ironically, he did what a lot of homeowners have done. He ran the country into a credit hole. And kept borrowing to cover it up. He always thought that things would get better tomorrow, and by giving tax rebates we could spend our way back into "prosperity."
This might have been more successful if the Iraq war was not also creating such a huge deficit. They seem to have forgotten that the reason that conservative USED TO abhor the deficits was that it takes money out of the economy that might be used for investment and growth. So, his tax rebates might have helped give a shot in the arm, but like meth - when the jolt was over we were left in worse situation then we started. To this Bush replied - just like the junkie - with a run for another "fix." At this point, crisis was inevitable,and his motto should have been "Apres moi la deluge!"
He might have gotten away with this until he was out of office, except for the mortgage crisis. The sad thing is that this was totally avoidable. All he had to do was listen to people who were warning about the situation. If he did not believe the early warnings, he could have gone down onto the streets to find out. But of course he ignored it all. That is why I like to say that he sacrificed common sense on the altar of deregulation. (Exactly what Reagan did that created the S+L crisis and bailout. Why do they never learn?)
This leads to the real problem of the Republicans and why they cannot lead the country - they always lead us into one disaster after another. This is:
--- They always put ideology before reality.
And so they live in this fantasy world divorced from reality. This leads to thinking like:
1-- Hussein is a bad guy so we can get rid of him even if we have to lie to the American people to get them to go along with the invasion.
PLUS
2-- We are so all powerful that we will immediately crush them and they will be so grateful that they will love us, and the oil will be flowing agin in 6 months to pay us back, and I will be remembered as the great hero.
That was such a piece of Pollyanna fantasy that I can't believe that anyone could have believed it. So here we are $1 Trillion in the hole, for what?
----
NOW what does this all have to do with Apple? Just look at the price.
And I am long APPL since 2006, but I'm tempted to play along. The road is surely upwards, but bumpilly..
I'd just sure hate to miss the moment the afterburners are lit..
hahaha
pobrecito
AAPL is being manipulated down by hedge funds who are in full control of the stock market right now. They are short the market. Steve Jobs made an off-camera, yet still, widely circulated statement a few weeks ago that hedge funds are responsible for the depressed share price of AAPL stock. Now the hedge funds, already in full control of AAPL, have implemented a vendetta against AAPL stock as a result of Streve's comments. Thus, the unnaturally large ratio of loss of AAPL stock price, occurring on a daily basis, as measured against the QQQQ (since Steve Jobs' comments).
It is so sad.
Hedge funds are ripping AAPL stockholders off.
They are boxing the stock, then any weakness.... unloading....
I say:
Long Live The United States Of America.
I will not undermine America.
Short sellers....ah forget it.
Britain's financial regulator said Thursday it was temporarily banning the short-selling of shares in financial companies that are listed on the London Stock Exchange. Short-selling, in which investors sell borrowed shares in hopes of buying them back later at a lower price, has been blamed for sending bank share prices plummeting and exacerbating turmoil in financial markets. U.S. regulators tightened rules on the practice Wednesday.
The feds also think short sales aren't part of the problem!