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WHY isn't this market CRASHING?


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#11 Iblayz

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Posted 02 January 2019 - 10:23 PM

Many years ago as the market was giving up its Internet boom euphoria, I had taken a long position intraday and was feeling pretty good about it at the close. Motorola was reporting after the close, and in those days, that was a BIG report in the tech space. The semis had been getting killed and everything was oversold. Motorola's report was horrible. They missed by a mile and issued a warning that looked absolutely terrible. Genius me went into action. I sold my longs and went short the semis on leverage. I was gonna win big time. Overnight, some bongo-head analyst who, at the time was the big name analyst in the space, UPGRADED the semis because......get this....."the news can't get any worse". The semis were up HUGE at the open and my position was crushed at the open as well. If the internals hadn't been so terrible lately, I could easily see the same result here because...….once again......the market is overreacting to everything......as it is so prone to do.

 

To illustrate, Apple's big warning was for revenues to be 8% below consensus estimates. Holy Cow! But wait, the stock closed today at 157.92 and that price is 32.3% lower than its high on October 3rd. AND, the last after-hours price was another 7.5% below that price and 37.5% below that same October 3rd price. Now, at what point would a reasonable person say that this news had been priced into the stock?

 

As another example, on July 31, 2018 Apple closed at 190.29 (down about five bucks from three trading days earlier). Funny thing happened. Apple guided HIGHER on July 31st. That guidance was for revenues of $60-62 billion and the street's consensus had been $59.4 billion. The stock gapped OPEN the next day at 199.13 and didn't look back. Let's see...…..traded it up HUGE (over 200) on the upward guidance of $60-62 billion. After hours today the stock traded at in the 146 area because...…..get this......revenues are going to fall all the way to $84 billion. Opened at 199.13 (August 1st) on guidance to $60-62 billion.....traded down huge after hours (today) to the 146 area on guidance of $84 billion. Sometimes, it just gets stupid.

 

Oh, I forgot, this is all the FED's fault......dummy me! (And no. I am not mad because I am long. I sold longs today shortly before 2:45 PM.) Just pointing out an obvious absurdity. Even considering the clearly maturing replacement cycle and stretched retail pricing, it is still on the absurd side. Cook said it was all about China and iPhone sales there. I bet the Chinese people are pissed and are taking it out on Apple......Huawei had apparently achieved iconic status with the Chinese people. This could easily be more about that than overall Chinese weakness.


Edited by Iblayz, 02 January 2019 - 10:26 PM.


#12 dTraderB

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Posted 03 January 2019 - 08:48 AM

Disappointed the market did not go much lower but maybe I can still catch another spiked down during the cash session, could go as low as SPX 2400 or even a 2300 handle.

 

Market should be crashing real hard during this time of extreme bad news but just doesn't want to retest that December low.

 

My system is ST, IT, LT SHORT  with long triggers at:

ST SPX 2498 

IT 2535

LT 2580



#13 dTraderB

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Posted 03 January 2019 - 08:53 AM

Of course, insiders SOLD APPLE before yesterday's earnings warning.

 

 @business
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They told you so, Apple. Japan’s machinery makers gave CEO Tim Cook a warning well in advance about plummeting Chinese smartphone demand https://bloom.bg/2CNJI85  via @bopinion

Dv-2LAoWoAA50ya.jpg

 



#14 dTraderB

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Posted 03 January 2019 - 09:00 AM

Agree with this. Basically, I am expecting a few sharp spikes down, holding above SPX 2420, but a low probability of going as low as the December SPX low, or even to a SPX 2200 handle, but then a monstrous rally to as high as SPX 2700, about a 10 to 12 % rally. 

 

All this excludes the real possibility of major geopolitical shocks that can take the market far down.

 

Douglas KassVerified account @DougKass
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Douglas Kass Retweeted James DePorre

Respectfully, Rev. I expect the markets to recover from the immediate $AAPL impact. As to the relevance of $AAPL - it has been losing its market leadership role for a while. Not for a while did the talk shows lead off with a discussion of the co. - which was

Douglas Kass added,

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James DePorre @RevShark
Apple's Earnings Warning Could Tell Us Whether the Market Is Ready to Bottom The action on Thursday will provide major insight into whether the indices are close to support or whether…
5:16 AM - 3 Jan 2019 from West Palm Beach, FL


#15 dTraderB

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Posted 03 January 2019 - 09:04 AM

Come on, APPLE, go down to 120! 

 

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“people are still chasing Tech stocks on bounces to lower highs (then forced to sell them at lower lows)” -@KeithMcCullough This is a brilliant observation and explains why buyers went from despair to elated optimism in the blink of an eye - remember:

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5:38 AM - 3 Jan 2019
 
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#16 dTraderB

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Posted 03 January 2019 - 09:06 AM

  1. Sven Henrich Retweeted Bloomberg

    The new easing cycle begins before the tightening cycle ever got started

    Sven Henrich added,

    BloombergVerified account @business
    China's $625-billion "liquidity hole" will prompt monetary easing in January, Citic says https://bloom.bg/2F5UdVV 
    5 replies7 retweets31 likes
    Reply
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  2.  

    On a practical note: now that US earnings are getting impacted by

     

    trade wars pressure is increasing to resolve then and any real

     

    resolution will set up for a massive relief rally. Headlines won’t do, only a real agreement.

 



#17 dTraderB

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Posted 03 January 2019 - 09:09 AM

$130 to $135 is that level for APPLE; that is why I would buy APPLE calls around these levels or lower.

 

APPLE, the company, will be buying their shares today and in the near future at current prices and lower, tens of billions. 

Of course, this will temporarily lift the stock but unless the trade war is resolve quickly AND APPLE comes up with a great product soon, APPLE is just another tech company.

 

Peter BrandtVerified account @PeterLBrandt
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Impossible for $AAPL to decline below a certain level because of their cash stash? Most likely true, but throughout late 1970s/early 1980s entire $DJIA traded at less than book-value-per share. #Fundamentals_Change

4:14 AM - 3 Jan 2019

 



#18 dTraderB

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Posted 03 January 2019 - 09:13 AM

Like January 2nd 2016 when the year started with another massive risk off episode triggered by worries about China's hard landing & etc, 2019 starts with similar worries about China, US growth, Fed policy, oil prices, EZ troubles, strong dollar and EM risks. Repeat of 2016 panic?



#19 dTraderB

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Posted 03 January 2019 - 09:15 AM

I gave up trading GOLD a long time ago....

 

Jesse Felder @jessefelder
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Despite a rally of almost 11% since Gold's August low, the bulls have yet to stampede their way back into the shiny metal. https://www.biancoresearch.com/?p=168976  by @biancoresearch

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11:35 AM - 2 Jan 2019


#20 dTraderB

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Posted 03 January 2019 - 09:18 AM

A nice 7.65 average profit on the NQ short trade and then a mammoth 2.5 points profit on that last NQ long trade !

 

Not complaining, looking forward to a spectacular 1000-plus NQ points profit day early in 2019. Could happen this week if I go with 8-lots positions (4-2-2)