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APPLE re-opens Crash Window, bears on the prowl


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#1 dTraderB

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Posted 01 November 2018 - 07:24 PM

The shocking fact about Apple's conference call was the rather tepid & low-key tone that sounded more funereal than celebratory after a fairly good earnings report with minor misses that would normally result in a few points shaved off the pre-earnings level. 

 

This is world's largest company, a behemoth, with sales & revenue larger than the GDP of more than half the world's nations, A trillion market cap, until 4:30pm EST today, and a leader in global technology. 

 

So, it was downight depressing to detect the underlying pessimism and the surprisingly lowball earnings estimate for Q4. That's a holiday period with an economy running hot, record unemployment rate, earnings rising, and tons of disposable income available to shop until you drop. Why the lower than expected estimates? That's the main reason they took Apple's stock to the woodshed and took off 14.41 points or 6.48 % as of 8pm EST, a few minutes ago. 

 

Unless the NFP report on Friday morning can recoup some of the afterhour losses in the major indices, the path of least resistance is down, and back below SPX 2700. It has been a spectacular 3-day rally and it could still continue if the bulls come out in full force tomorrow and there is even an average NFP report that can stem the downward momentum.

 

Of course, a bad report will lead to carnage. Lets see if the bulls can hold the line at 2710, get a decent report, and try to regain the momentum.  Not impossible but it is a tough task!

 

Bear market rallies can be brutal. Tomorrow, we will confirm if this was one of those rallies or a genuine bull market resumption that can shrug off Apple's disastrous earnings report & conference call. 

 

SPX 2710 must hold or else the bears will be in charge.

 

45156409_10156389438820783_9548463359939


Edited by dTraderB, 01 November 2018 - 07:27 PM.


#2 12SPX

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Posted 01 November 2018 - 07:27 PM

ES just turned positive, not sure why looks like there won't be a crash tomorrow anyhow!



#3 dTraderB

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Posted 01 November 2018 - 07:28 PM

Apple Inc.
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NASDAQ: AAPL
222.22 USD +3.36 (1.54%)
Closed: 1 Nov, 7:59 PM GMT-4 ·  After hours 207.81 −14.41 (6.48%)


#4 dTraderB

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Posted 01 November 2018 - 07:29 PM

NQ is down 50 points as I write. 

It could be th emarket can absorb the APPLE losses and resume the rally. 



#5 dTraderB

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Posted 01 November 2018 - 07:39 PM

Apple Inc. provided the first indication of how well its latest line of iPhones is selling when the trillion-dollar company delivered its fiscal fourth-quarter results on Thursday afternoon, but its forecast caused issues.

Apple’s AAPL, +1.54%  outlook for the December quarter, historically its largest for sales and profit, came in largely below analyst expectations, despite the launch of iPhone XR sales in the period. A healthy earnings beat for the fiscal fourth quarter and record profit and revenue for the full fiscal year could save Apple shares, which fell more than 7% at times in after-hours trading.



#6 dTraderB

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Posted 01 November 2018 - 07:45 PM

When the going gets tough, Apple hides its numbers

Apple Inc. dropped a bomb on Thursday, but it wasn’t the weak forecast for the holiday quarter: It was the fact that it will no longer disclose unit sales of its products for investors, as it has for more than a decade.

Apple AAPL, +1.54%  reported that unit shipments for the iPhone were flat at 46.9 million units sold in the fiscal fourth quarter Thursday, then executives in a conference call said it would be the last time the company gives such information. Investors should clearly take this as a sign that unit sales will decline in the future, and they will not be told.

Read MarketWatch’s live coverage of Apple earnings

Apple’s reasoning for the move was laughable. Chief Executive Tim Cook compared calculating the performance of a company valued at more than $1 trillion (at least until the stock opens on Friday) to an individual going grocery shopping.

“This is a little bit like if you go to the market and you push your cart up to the cashier and she says or he says how many units do you have in there?,” Cook said.

No, Tim, it isn’t like that. It is more like when Oracle Corp., ORCL, -0.51%  stopped breaking out revenue for its once hot cloud business after those numbers started to slow down. Or, to find a shopping analogy since Cook seems to like those, it is analogous to a manufacturer who has long sold you a package of eight cookies telling you that it may not be eight inside that package anymore.

 

Even that analogy is flawed, though, because at least you get to see what is inside the package once you buy it. Buying Apple stock doesn’t even get you that peek.

While Cook’s explanation was aggravating, Chief Financial Officer Luca Maestri’s was just confusing. He said Apple will stop reporting the important figure because it ... wants to make customers happy?

“Some people may fear that this now means that the iPhone units are going to start going negative year-over-year, because it’s easier to talk about great things and not show the details of things that aren’t so great,” he said.

https://www.marketwa...bers-2018-11-01



#7 dTraderB

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Posted 01 November 2018 - 07:51 PM

After Thursday’s close, AAPL reported record earnings, but gave a slightly disappointing revenue forecast. Last week the exact same story played out in AMZN and is what contributed to Monday’s collapse. But the thing about headlines is they lose their bite with each retelling. Apple’s disappointment could weight on prices Friday, but it won’t be anywhere near as big of a deal as it was when AMZN told us the same thing. The shock wears off over time and life moves on. That is exactly what is happening in Thursday’s after-hours trade as the S&P 500 only dipped a fraction of a percent following AAPL’s “disappointing” news.

While the next move is still higher, we shouldn’t expect prices to race back to all-time highs. As I wrote earlier, everyone knows markets don’t move in straight lines and that means any rally higher will end in a step-back. Bulls and bears will argue if this will be two-steps forward, one-step back, or one-step forward and two-steps back. At this point, it doesn’t really matter because the next move is higher and the move after that will be a step-back. Once we get there, we can weight the likelihood of higher-lows or lower-highs. But until then, enjoy the (somewhat bumpy) ride higher.

 

Screen-Shot-2018-11-01-at-6.25.17-PM.png



#8 tradesurfer

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Posted 01 November 2018 - 08:38 PM

It still is quite amazing that Warren Buffett bought a boat load of Apple, when YEARLY RSI was in the high 90's

 

If we get an eventual 50% haircut in aapl i wonder if buffett will sell



#9 bighouse1006

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Posted 01 November 2018 - 10:53 PM

Do you know why Buffett out performs all these genius fund managers with their magical algorithms? Because he can survive a 50% drawdown and make his money right back by sitting tight over the next 10 years. He would never sell aapl but probably buy more when it gets to 100/ share.

#10 NAV

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Posted 02 November 2018 - 12:30 AM

Do you know why Buffett out performs all these genius fund managers with their magical algorithms? Because he can survive a 50% drawdown and make his money right back by sitting tight over the next 10 years. He would never sell aapl but probably buy more when it gets to 100/ share.

 

Exactly ! Buffet's genius is not in picking stocks. His genius lies in his philosophy. He believes in the long term upward trajectory of the market as long as capatilism is alive. We have had two 50% market corrections in the last 15 years and it was a learing experience to see Buffet ride it. The man has both brains and balls. Most people lack both - brains to recognize "what is" and balls to act on it, which is why most people are poor.

 

 

 

Also it's instructive to read this paper on Buffet's alpha

 

http://docs.lhpeders...ffettsAlpha.pdf

 

His style is not about buying sexy growth stocks in a growth phase, but mature stocks with low beta and using leverage to magnify his returns. Read the above paper to understand how he derives his leverage.


Edited by NAV, 02 November 2018 - 12:33 AM.

"It's not the knowing that is difficult, but the doing"

 

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