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The Apple Investor blog is the creation of Ernie Varitimos, he provides market analysis and insight. Ernie has over 30 years experience in technology, finance and securities trading.
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  • Market Report for Wednesday February 10, 2010
     A Few Bad Apples Will Spoil the Whole Bunch

    Greece is in a load of hurt, which is threatening the world recovery

    Wall Street got a lift from news that Germany may offer debt relief to Greece in the form of loan guarantees that for now are holding off default concerns. The real concern isn’t Greece, as that small country has little bearing on the world economy. The real concern is the domino effect that may ensue as there are a few other European countries at the brink of failure, such as Spain, Portugal Italy and Ireland. Should all default it would put a halt to a world-wide recovery. The European Central Bank (ECB) is holding emergency meetings today to discuss the German plan. We need to keep an eye on these developments. Oh, by the way, the Germans debt situation isn’t so rosy either – ARG!

    Classic Bull-Bear Clash

    Wilshire 5000 Full Cap Index Daily View

    Wilshire 5000 Full Cap Index Daily Showing trading range defined by moving averages

    Over the past few days I’ve been describing this trading range the market is entering, defined by the 20/50 day movings averages on top, providing resistance, and the 200 day moving average on the bottom providing support. Those boundaries should provide a well defined arena for the Bulls and Bears to do battle. So far it has been a stale mate, but it has resulted in, and will continue to result in a great deal of volatility as each of the combatants try to establish dominance. And there’s plenty at stake for sure!
    [click chart to enlarge]

    The chart show is the Wilshire Full Cap 5000, and if you enlarge it you will see it printed a bullish engulfing candle. But I wouldn’t put too much faith in what that implies just yet. There’s a lot of work for the Bulls to do to recapture the 20/50s and it’s not going to happen without a ferocious battle with da Bears.

    Bullish Engulfing: A reversal pattern that can be bearish or bullish depending upon whether it is in an uptrend or downtrend. The first day is characterized by a small body, followed by a day whose body completely engulfs the previous day’s body.

    Economy and the Fed

    At 10 AM this morning Fed Chairman Ben Bernanke will provide testimony in front of congress as to how the US Central Bank will tighten monetary policy. That should be good for a little ride in the market. We have been riding zero percent interest rates since December of 2008, and fed a full course meal of liquidity and bank asset purchases. It will be very interesting to see how the Ben-Meister plans to ween us off that fatty diet.

    And finally Apple was relatively stable yesterday, with a nice uptick but still has not come even close to regaining the massive hit it took since earnings and the iPad announcement. Apple continues the indecisiveness of direction by printing a spinning top doji yesterday. Overall AAPL is still in a weak downtrend, even though it finished at 196.19 up with a respectful gain of +2.07 (1.07%).


    Apple along with many other leaders like Amazon (NASDAQ:AMZN) are still struggling to regain their footing. Other big cap leaders are finding the going just as tough. We are still in a down trend, thus the Bears have the upper hand. However the stakes are high, and the Bulls may get backed into a corner, and that’s when things usually get rough, as Bulls don’t like to be cornered. Financials have not yet found that strong bid they need to propel the S&P forward, and that is a critical components. Perhaps that will change today with the Fed testimony. All I can say for now is that we are stuck, and until we lose the 200 day on all the major indexes, I’m not ready to declare a new Bear market, thus we are still in the midst of a correction.

    Disclosure: No POsition
    Tags: AAPL, AMZN
    Feb 10 7:24 AM | Link | Comment!
  • OMG! Apple Dumping Google Search for Microsoft Bing?


    Learn More

    According to Business Week Technology, Apple is courting Microsoft’s Bing as a replacement for Google (NASDAQ:GOOG) Search on both the iPhone and on Safari! What strange things can happen when phones, sex, and money gets between to brothers. Well, maybe not sex, but definitely smart phones and the huge advertising jackpot that awaits the search victor.

    Have you tried Microsoft’s Bing? It’s not bad, it produces Ok results. By the way, they call it a decision engine, not a search engine. I haven’t done an exhaustive study, so I’m no expert to comment either way, it’s very AJAX-ie. But to unseat Google search, you have to be better than slick, better than an equivalent search service, you have to stand out, and compel people to use your search. Let’s face it, when your search engine becomes a verb in the English language the way Google has, that’s a mighty big piece of mindshare to overcome.

    Is it Really About Good vs Evil?

    Google Corporate Philosophy: Do no evil.


    Now for the REALITY CHECK. If you had your mind programmed to think… Apple, Google good, Microsoft Bad. You’re gonna need some reprogramming, and a dose of reality. Sure, we all believe Apple stands for all things good, simple, ethical, and Google can “do no evil,” right? At least that’s what Google claims as their motto, and it’s number “6 of 10″ in their corporate philosophy.

    Leaves one scratching their head about their censorship deal with communist China, was it truly a noble deed to enter China, and try to democratize information, and free the minds of 2 billion people? Or was it an opportunity to capitalize on the explosive growth of a growing, and perhaps one day dominant economic superpower? Check your reality meter now, it all comes down to what will make us MO MONEY! Hey, I’m Ok with that, just don’t go around saying you’re trying to save the world.

    So, is Apple willing to sleep with the evil empire, in order to burry their new rival, their former brother in solidarity, the guys they broke bread with at the board of directors round table, their once close friend and bowling buddy, Google? Apparently yes, if it means a better deal and more market share.

    Now don’t get me wrong. I’m not saying Apple is selling out. What I’m saying is that all’s fair when it comes to business. It’s all just business, right? No hard feelings, no animosity. Hey, in fact, just to show there’s no hard feelings, let’s go get a drink, wadda you say? Hmmm? You go first, I’m right behind you.

    Disclosure: Cash
    Jan 20 9:26 AM | Link | 1 Comment
  • Apple Earnings Call Set for 5 PM EST January 25


    Apple’s conference call webcast discussing Q1 – 2010 financial results will begin at 2:00pm PT/5:00pm ET on Monday, January 25, 2010. Apple also released the 2010 proxy materials and the 2009 Form 10-K.

    Although there’s no statement from Apple, I don’t think we can expect to see, or I should say hear, Steve Jobs on the webcast, more likely it will be Apple CFO Peter Oppenheimer and COO Tim Cook that will present. Steve will be saving his strength for the rumored media event, at San Francisco’s Yerba Buena Center, either Tuesday the 26th, or Wednesday the 27th. In the past, Apple has been fond of releasing products on Tuesdays. Perhaps they’ll want an extra day to see how the markets react to earnings? Nah!

    Question: Will It Be a Blowout Quarter?
    That’s a rhetorical question of course, it’s always a blowout quarter for Apple. The real debate is over how much of a blowout and what it will look like.

    Click to Enlarge


    Philip Elmer-DeWitt of the Fortune Apple 2.0 blog compiled statements about a week ago from analysts with their prognostications on iPhone sales, that “range from a high of 11.3 million iPhones from Broadpoint Amtech’s Brian Marshall, to a low of 8.17 million from JP Morgan’s Mark Moskowitz.” Philip pointed out that even at the low end of estimates, that represents nearly an 11% increase over the same record quarter last year.

    And before skipping town and missing all this wonderful cold weather for some balmy and sandy vacation in Antigua, Mr DeWitt published analysts estimates of iPod and iPod Touch sales, and produced this spify graphic above, showing the decline of the iPod line in favor of the iPhone-like Touch.

    So, how many Macs did Apple sell? Well according to Broadpoint.AmTech analyst Brian Marshall, Apple blew away their previous all-time record of 3.03 million Macs, and pumped out 3.3 million. Wow, and I feel compelled to tell you that I did my part to help those numbers along by purchasing two MacBook Pro 15 inch models in 2009.

    So What Does this All Mean?

    It means that Apple is a kick-ass company that I’m glad exists, because if didn’t, this rock we live on would be far more boring place. And I wouldn't have met my wife, had these two beautiful teenage daughters, who provide constant character building experiences, and I probably wouldn't have been inspired to become consultant, which would mean I'd probably end up collecting garbage or selling cars, and I wouldn't be writing these words right now.

    Next week we can expect to see analysts starting to publish their final answers to this question.

    Disclosure: Long AAPL
    Tags: AAPL
    Jan 12 10:53 PM | Link | Comment!
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