Calling an audible before earnings on October 25, 2012: First congrats to $AAPL for catching up to Samsung with the i5 and up to $AMZN and $GOOG Nexus with the Mini iPad. After further review the call is: A day late and a dollar short. Old technology and over priced. The competitive price for a small tablet is 199-249. Not 329. Apple EPS has been slipping 3 quarters in a row and maybe one more time: 13.87 – 12.30 – 9.32 and 8? TTM for last 4 qtr is approx 44. Give a multiple of 13 = 572.00. Should Apple slip further in TTM or should we get a new recession with a multiple compression to 10X earnings or lower Apple has far more to fall. For Apple to reach say 780 they would need to produce EPS of 15 x 4 = 60 x 13 multiple = 780.
A couple of interesting support areas: Bounced off MA50 on weeklies 3 times in 2011 current 551. I would watch the MA200 current 583 on the daily is very careful and perhaps start buy to hold at that area.
On the positive side: $AAPL is already down 90 from 52HI so it is heavily discounted before earnings and the next quarters will be great with the pipeline full. Lots of people with i3s and i4s and iPads will be up-grading or adding perhaps an Mini iPad.
Conclusion is that $AAPL is no longer a sure bet and Apple needs to start innovate and bring the A-game every quarter if they want to keep the same growth and earnings per share we have become accustomed to.
Should $AAPL blow out earnings again with a big surprise that would change everything.
Added: Apple having problems selling iPhones in India:
Up-date: MA50 on the weeklies is now 555 and is in play.
$FB FACEBOOK LOCK-UP RELEASES: August 15th, 2012 (next Thursday): 268 million shares, 10% of shares outstanding. October 14th: 249 million shares, 9% of shares outstanding. November 13th: 1.332 billion shares, 49% of shares outstanding. December 13th: 124 million shares, 5% of shares outstanding. May 17th, 2013: 47 million shares, 2% of shares outstanding.
Over the next 4 months, in other words, 2 billion Facebook shares will become eligible for sale—about 70% of Facebook’s total shares outstanding.
Source: Henry Blodget August 6th, 2012
The best traders stick to their guns. They trade with conviction and they believe strongly in their ideas. So did I when I shorted $CMG at various levels. But after holding out for 6 month and taking some loses all the way up to 440 I covered around 400 with small loss. Congrats today to the traders who believed. I’m sorry I did not make it to payday but Im still happy my idea was right.
2011 was my first year trading full time. It was a difficult year to trade but my port folio was up 15.7% compared to $SPX that was down 0.4%.
Looking back at the $SPX chart for 2011 it now looks so obvious. Should have sold in May and gone away. The clear H & S formation LS in March H in May and RS in August was so obvious and when it broke the neckline I should have sold all and gone short. While I did not lose money in June I lost out on a great opportunity to short and bank extra coins.
What is obvious to me right now is that the MA150 and MA200 is trending down and that Europe is in horrible shape as per my last post. While we got a thin rally back in the US, Europe did not and that is worrisome. If you are not a trader I would stay out and stay out until a BIG sell off occurs. If you are a trader nible at some long and get ready to cash out when the PIIGS hit the fan again. Greece, Spain or Italy or all 3 will provide a buying opportunity sometime this year. I expect 2012 to be the year when Greece finally will throw in the towel and declare they can no longer pay their debt. Necesarry Austerity in Europe and their inability to print money like the US will kill their GDP and growth for years to come. History tells us that you cannot cut your debt and grow at the same time. Without Europe the US cannot rally very far.
$AAPL deserves a new high based on new expected record earnings. My target is 450. Sell off target 350. Some high fliers I have on my watch list for shorts are $MCD $CMG $SBUX $NKE like $NFLX and $DECK $CRM the former will have their day to pay the piper.
I have a gut feeling that the market will top after the earnings release of $AAPL (Euphoria) and start a long sell off that will take us below 2011 lows (Fear). After the sell off I will look for strong US companies with high dividends and low P/E values and new $AAPL entry. $AAPL will break 500 but not before Europe get their debt issues resolved. Happy New Year to all.
Europe holds the key and unfortunately that key is broken. So what now and whats next. I bring up Spain because Spain is in trouble and Spain is too large to fail. Greece and Portugal is small potato. Spain is a whole meal. Spains unemployment is now almost 23% and increasing with no end in sight. Spains housing market is going lower and lower with no end in sight. Now 14 consecutive quarters of dropping prices. Foreclosure rates are going up and the Spanish banks are insolvent if they had to mark all properties on their books at current value. By the way so is the US banks. The US should really pay attention to what happens in Europe because what happens there will happen here. The PIIGS has learned that they can take the other countries hostage and just do nothing or very little until they get some help. The less they do the more help they get. Crazy. But England got it figured out and they put the foot down. Soon other countries will figure it out. Sweden will probably say no as well. Why throw good money after bad money. Voters in stronger countries like Germany will not sacrifice their standard of living because citizen in the PIIGS countries are lazy and living above their means. Germany’s dilema is should they take a big loss now or an even bigger loss in the future. The old saying your first loss is your smallest loss can be used here. In reality Germany will probably give just enough to keep them alive for while longer RE: Kicking the can down the endless road. If Spain’s banks goes down and they need to nationalize the entire card house will start to crumple. Portugal is already in a worse situation. European leaders are stepping in quicksand and they are getting deeper and deeper into trouble and I’m having a hard time seeing how they can get out of it without having to re-set the entire economy. This will guarantee a slowdown that will roll over to China and then to the US. RE: Cramer DEFCON 2. Either way. Strap yourself in because it is going to be a volatile ride. Fortunately 12631 traders with help of PPT can take advantage of these wild swings. I will try to trade the top and bottom with strict portion control to manage my risk and I think we will be able to bank a lot of coin in 2012. Buy every dip and sell every rally. Buy fear and sell euphoria. I have traded The PPT O/S and O/B all year very successfully but not as disciplined as with the new system. Already up 16%+ for the year and look forward to do even better in 2012.
I had to go to Chipotle for dinner to see what the big fuss was about. Great dinner and good deal. I would go back for sure. I liked the clear information about what meat has and has not added hormones and antibiotics. I liked that the calorie count is clearly marked on everything on the menu card. The price is not high for a monster burrito like these that can be easily shared. To much for one person. The ad ons are really cheap. Beer 2.40, Soda 1.40, Chips and Cuacamole only 2.40. The place had a line from the door and they were super busy. Compared to QDoba $JACK and Baja Fresh $PRIVATE they were 4 times as busy. I’m mighty impressed but because I like the food doesn’t mean I like the stock at these lofty prices. My biggest beef is that anyone can do what they do and the entry price is cheap. No proprietary ideas. No patents. They should be easy to copy. The “Mexican” experience was lacking due to the fact ICE cracked down on Chipotle and send home 1/3 of their work force back in May. Again one day this stock will Peter out and stock will drop 20-50% in a New York minute. One bad quarter and it is the elevator down. Definitely on my radar screen for a short. Market Cap: 10.5 B, PE: 51.7, EPS: 6.41 52 week high: 347,94, 52 week low: 212.58. Closing today $337.075.64(1.70%)
I like the risk reward for a short set up: Stock has an up-side of 3-10% tops while a downside of 20-50%. I currently has no position but may take a position within the next few days
Have been reading a bit about Greece, Spain and Italy over the weekend that has made me turn much more bearish. Austerity kills GDP and jobs. Unemployment in those countries are going sky high and consumer confidence dipping to long time lows. I hope the US is learning from their mistakes. As Austerity is coming to this country that will work against job creation and stop GDP right in its tracks here to. In Europe 17 countries has to agree. Hard working countries like germany who got their shit in order has to pay for lazy Greeks who don’t care about shit. I would love to see what the US congressional super committee comes up with. Can they come us with real savings and without hurting the job markets? Doubt it. Austerity cost jobs. Higher taxes cost jobs. Pick your poison.
Maybe we already hit the top on Dow and S&P last week or we will do shortly. Can’t see us go much futher than 12350 and 1310. Don’t think we will see 12500 and 1350 on this wave up. New target on S &P 1260. then 1220.
Mr Market doesn’t always give us what we want. I would love to see 1310 but don’t think it will be that easy.
What news in the forecast:
Next Euro Disaster de Jour like missed targets for Greece and Italy
Occupy Wallstreet will grow, turn violent and start targeting major US corporations.
Euro going down. Dollar going back up to 80
Bonds: $TLT going back up to testing old highs around 125
Gold going below 1500
Silver going below 30
Food prices going through the roof creating more screwflation. Will start riots.
Good luck all with your trading. Be careful out there.
Good Morning Sold $SDS 1/4 up 0.16. Seems like 1280 is new pivot point in 1260-1300 range. Even though the dip was small PPT still nailed another O/B yesterday. As we go sideways the O/B signals gets worked off. For actual PPT readings you have to become a paying member.
It is great to be part of IBC and 12631. I have learned so much from all the traders on here. Just the fact that you post your trades here in front of your piers makes you think twice before you enter a trade. I am trying to be a trader and shake off the gambling side. Some would say it is all gambling but I see it more like a Poker game where math, skills and psychology makes the difference.
With help of PPT I am developing a completely new trading strategy that so far has been profitable. I am up about 13% for the year but could have been up much more if I had invested a higher percentage of my funds. I have remained in 70-90% cash position since October 2010. But when trying a new trading style you like to take small trades to make sure it works.
Since January 2011 I have mainly traded on overbought or oversold PPT signals. The PPT Hybrid score has been unbelievable on spot all year long. How I trade depends on where in the trading range we are and if we are in an uptrend or down trend. Without a clear signal I sometimes don’t trade at all and that can sometimes be the best trade.
Since March we are between 1350 and about 1050. 1350 with multiple tops and 1050 with a double bottom. The range always like to narrow so lately we have been between 1150-1250 then 1225-1175 giving me a pivot point of 1200. So currently when we have the O/B and O/S signals I will Short a O/B signals above 1200 and cover when we get O/S or usually a little sooner. When we were below 1200 I would buy dips on O/S and sell rips on O/B signals or usually a little sooner.
I try to avoid fast moving leveraged stocks like TZA/TNA. SDS/SPY works in a much more manageable speed giving you a chance to correct.
Depending on the strength of the signal I go in 1/10 or 1/4. If a trade goes against me I wait for strong support or resistance before adding another 1/10 or 1/4. So far this year I never got to trade my last 1/4 or 1/10.
If you are not a member of IBC and 12631 sign up. It is the best money you could ever spend.
Special thanks to Ragin Cajun, ChessNwine and Fly for sharing their site and knowledge and also thanks to everyone else who put in their 2 cents everyday.