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If You Like Risk, Then By All Means, Buy on Apple Earnings

|Includes: Apple Inc. (AAPL)

On Friday the Nasdaq diverged sharply from the Dow and S&P on the back of Google's earnings report.  After today's close Apple earnings are out.  Given how sharply AAPL shares have risen into earnings it's pretty much a given that the Apple report will provide the sell-the-news type of event that early entry tech buyers have been looking for.

The major indices don't diverge for long and given the idea that AAPL earnings will offer a profit taking opportunity we suspect that the Nasdaq will come back to earth as opposed to the other indices playing catch up.

The S&P has now given us 3 reversal signals in a row and with conditions this overbought, we are looking for some type of correction early this week.  What we do know is we won't be drawn in by a strong opening either today or tomorrow as the chances for a reversal after the AAPL report are just too high for our level of risk tolerance.