Mark Dow Says $AAPL’s Momentum is Broken and the Stock Could See $425

“Apple fell under $500 in pre-market trading this morning.

It could continue to drop says trader Mark Dow. When a stock loses its momentum, you can throw out the fundamentals, says Dow. Based on a simple technical analysis, he believes it could slide all the way to $425:

While I’m here, let me make a quick, behavioral point on AAPL. AAPL has been THE story stock in the market over the past few years. It has been our collective obsession. It has sucked all the oxygen out of every financial chat room and could do no wrong. I can’t speak to the fundamentals, which may or may not have changed, but I do know this: once the fever breaks on a story that is so beloved, sentiment usually doesn’t stop deteriorating until the pendulum has overshot to the other side. And I get no sense we are near that point yet. I still see virtually all knife-catchers and no momentum shortsellers, and until this changes, it is probably not safe to buy the fruit….”

Full article and chart analysis 

Hurricane Sandy strikes again….

“Hedge fund manager David Tepper is on CNBC, and he just made an interesting point…

The ECB has just given investors another free “put” in Europe, and nobody is talking about it.

Specifically, the majority of the ECB has voted to lower interest rates, although it hasn’t been done.

What it means is that Draghi can now lower rates anytime he wants….”

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“Brian J. White, the famous Apple bull at Topeka securities is sticking with his $1,111 price target, which would be more than a double from here.

He says China is going to be huge, based on this weekend’s news that Apple sold 2 million iPhone 5s in its first weekend there….”

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“HONG KONG (Reuters) – American International Group Inc may raise as much as $6.5 billion from the sale of its remaining stake inAIA Group Ltd in Asia’s second-largest block sale ever, exiting a business the U.S. insurer helped found nearly 100 years ago.

AIG is offering its 13.69 percent stake in AIA , or 1.65 billion shares, in a range of HK$29.65-HK$30.65 apiece, sources with direct knowledge of the plan said.

That is a discount of up to 6.3 percent to AIA’s close at HK$31.65 in Hong Kong on Friday, the sources said, declining to be identified as the terms of the offering weren’t yet public. Trading of AIA was suspended on Monday at the company’s request.

The sale marks the end of an era for AIG in Asia and its Chief Executive Robert Benmosche, who took AIA public in Hong Kong in the world’s third-biggest initial public offering ever.

AIG was forced to sell parts of its massive business after the U.S. government bailed the company out in 2008 as it teetered on the brink of collapse. The United States ultimately sent $182 billion on the rescue. AIA was one of the assets it put up for sale.

Since AIA’s $20.5 billion IPO, its shares have soared about 61 percent and become a top choice of fund managers looking to benefit from growing wealth in Asia and booming demand for insurance and other financial products.

The widely expected block offering of Asia’s third-biggest insurer will be surpassed only by Vodafone plc’s $6.6 billion stake sale in China Mobile two years ago. The offering also comes one week after a lockup on the shares expired, adding to two other rounds of AIA share sales earlier this year that had raised about $8 billion in total.”

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“LONDON (Reuters) – A win by Japan’s conservative Liberal Democratic Party lifted the dollar to a 20-month high against the yen on Monday, while uncertainty over the prospects for a U.S. budget deal sent European shares lower.

U.S. stock index futures pointed to mixed open on Wall Street where tech giant Apple’s shares will be in the spotlight because of sharp falls in pre-market trade after Citigroup cut its rating for the stock. <.n>

The biggest moves of the day came in the currency market following a landslide election victory for Japan’s LDP on Sunday which opened the way for a shift in economic strategy designed to lift the world’s third largest economy out of recession.

The triumph was seen as piling pressure on the Bank of Japan to ease further at its next policy meeting, which ends on Thursday, setting the stage for an even bigger fall in the yen.”

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“Soybeans rose to a five-week high after crushing in the U.S., last year’s biggest shipper, increased in November to the highest level since 2010, adding to signs of stronger demand.

Crushers in the U.S. used 157.3 million bushels last month to make animal feed and cooking oil, the biggest amount since January 2010, data from the National Oilseed Processors Associationtracked by Bloomberg showed. U.S. exporters sold 1.319 million metric tons in the week ended Dec. 6, the most soybeans since Nov. 2010, according to government data.

“Strong demand for U.S. soybeans, both domestic and abroad, remains the main factor supporting prices,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia (CBA), said in a report e-mailed today.

Soybeans for March delivery climbed 0.5 percent to $14.99 a bushel by 6:26 a.m. on the Chicago Board of Trade. Earlier, the price touched $15.0125, the highest for a most-active contract since Nov. 8. The oilseed is heading for a 24 percent gain this year. Corn for March delivery was little changed at $7.3125 a bushel, set for an increase this year of 13 percent.

Wheat for delivery in March rose 0.4 percent to $8.17 a bushel in Chicago, up 25 percent in 2012. In Paris, March- delivery milling wheat was up 0.3 percent at 259.75 euros ($341.91) a ton, heading for a 33 percent increase this year. The Paris contract was at an almost $1.14 per bushel premium to Chicago as of Dec. 14, the widest price difference ever for the two contracts, data compiled by Bloomberg show.”

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“Brent crude fell for a second time in three days amid concern that deadlock in U.S. budget talks may threaten to curb economic growth and fuel demand.

The North Sea benchmark dropped as much as 45 cents, reversing earlier gains. European stocks declined for a third day on concern U.S. lawmakers won’t agree to a budget before more than $600 billion in tax increases and spending cuts known as the fiscal cliff start taking effect in January. The Stoxx Europe 600 (SXXP) slid 0.3 percent to 278.53, while indexes in the U.K.,Germany and France slumped.

“Debt reduction negotiations in the U.S. congress continue to cloud the macro outlook going into 2013,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a note. “Oil investors would prefer to wait on the sidelines until this is resolved before placing large bets.”

Brent for February settlement fell 25 cents, or 0.3 percent, to $107.91 a barrel on the London-based ICE Futures Europe exchange as of 12:30 p.m. local time. The January contract settled $1.24 higher at $109.15 when it expired Dec. 14. The European grade was at a premium of $20.70 to WTI, down from $22.42 on Dec. 14.

West Texas Intermediate crude for January delivery was at $86.67 a barrel, down 6 cents, in electronic trading on the New York Mercantile Exchange. Front-month prices advanced 0.9 percent for the week ended Dec. 14.”

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Gold is not tanking, but is down a bit despite last week’s announcement of more bond buying….

Gold is down $4.8 @ $1,692

“Brazil swap rates fell as analysts in a central bank survey cut their economic growth forecasts for a fifth straight week, supporting speculation borrowing costs will stay at record lows through the first half of 2013.

Swap rates on contracts due in January 2014 dropped one basis point, or 0.01 percentage point, to 7.08 percent at 9:57 a.m. in Sao Paulo. The real depreciated 0.1 percent to 2.0877 perU.S. dollar.

About 100 economists in a weekly central bank survey published today cut their median estimate for 2013 growth to 3.4 percent from 3.5 percent the week before. They raised their year-end inflation forecast for next year to 5.42 percent from 5.40 percent.

“Even though there are inflation concerns, the weak GDP numbers prevailed,” said Roberto Padovani, the chief economist at Votorantim Ctvm, in a phone interview from Sao Paulo.”

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“UBS AG (UBSN) is set to pay as much as $1.6 billion to settle claims of Libor manipulation by the U.S. Justice Department, the Commodity Futures Trading Commission, the U.K. Financial Services Authority and the Swiss Financial Market Supervisory Authority, said a person familiar with the probes.

The announcement could come by tomorrow, said the person, who asked not to be identified because they aren’t authorized to speak publicly about the matter. The $1.6 billion figure would be more than three times the 290 million pounds ($469 million) that Barclays Plc (BARC) agreed to pay last June to settle allegations that its employees conspired to manipulate theLondon interbank offered rate, which is used in bank borrowing.

As part of the case, U.S. prosecutors are planning to file charges against multiple bankers associated with UBS’s rigging of Tokyo interbank lending rates, according to another person with knowledge of the matter. The charges would be the first brought by the Department of Justice against individuals alleged to have manipulated Libor and comparable lending rates in Europe and Japan.”

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“Toyota Motor Corp. (7203) is poised to take back the title of world’s biggest automaker for 2012, as Volkswagen AG (VOW) fights General Motors Co. (GM) for second place heading into the final weeks.

The battle among the world’s biggest carmakers comes as the industry is headed for a record year. Global 2012 sales will top 80 million cars and trucks for the first time, as robust U.S. and Japanese purchases offset a European downturn, according to estimates from LMC Automotive. Toyota is rebounding from Japan’s 2011 tsunami to take the title from GM, while the fight for second between Volkswagen and GM remains too close to call, with less than one percent difference between their sales.”

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“Euro-area exports fell for a second month in October as the economy struggled to pull out of its second recession in four years.

Exports from the 17-nation currency bloc declined a seasonally adjusted 1.4 percent from September, when they fell 1.3 percent, the European Union’s statistics office in Luxembourg said today. Imports rose 0.6 percent in October and the trade surplus narrowed to 7.9 billion euros ($10.4 billion) from a revised 11 billion euros in the previous month. Labor- cost growth accelerated to 2 percent in the third quarter from 1.9 percent in the prior three months, a separate report showed.

The euro-area economy shrank 0.1 percent in the third quarter after a 0.2 percent contraction in the previous three months. The European Central Bank this month lowered its outlook for this year and 2013. Still, investor confidence in Germany, the region’s largest economy, jumped to a seven-month high this month and economic confidence in the euro area unexpectedly rose in November.

“There aren’t many signs that the economy will be improving before the second half of next year,” said Annalisa Piazza, an analyst at Newedge Group in London. “At least, things aren’t going to be worse than this year. Confidence has improved because of the perception that the ECB and European leaders are slowly but surely moving in the right direction.”

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“European stocks declined for a third day as concern U.S. lawmakers won’t agree on a budget before the holiday offset the election in Japan of a party that backs more economic stimulus. U.S. futures rose, while Asian shares were little changed.

Royal KPN NV slumped 14 percent as the Dutch phone company partly owned by Carlos Slim’s America Movil SAB scrapped its dividend. UBS AG (UBSN) lost 0.9 percent as the bank may have to pay as much as $1.6 billion to settle claims of Libor manipulation. PSA Peugeot Citroen (UG) gained 3.1 percent as Europe’s second-biggest carmaker said it is close to finalizing a deal with lenders to refinance debt at its banking unit.”

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“China scrapped a ceiling on investments by overseas sovereign wealth funds and central banks in its capital markets, part of government efforts to encourage long-term foreign ownership and shore up slumping equities.

Sovereign funds, central banks and monetary authorities can now exceed the $1 billion limit that still applies to other qualified foreign institutional investors, according to revised regulations posted Dec. 14 on the State Administration of Foreign Exchange’s website. The statement did not mention a new ceiling or an increase in the total investment quota allowed under the program also known as QFII.

The removal of the investment limit on sovereign investors “marks another step in the direction to gradually open up China’s capital account,” Wang Aochao, head of research at UOB Kay Hian Investment Consulting (Shanghai) Co., said by telephone today. “It’s part of a gradual process. QFII money still accounts for a very small fraction of China’s capital markets.”

China would “definitely” expand the foreign-currency quota provided under the QFII program once the current allotments of $80 billion are filled, Guo Shuqing, chairman of the China Securities Regulatory Commission, said last month. Regulators have since 2003 approved a combined QFII quota of $36.04 billion as of Nov. 30 under the program which allows foreign investors to buy yuan-denominated securities, the SAFE said on Dec. 11.”

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“The Australian dollar rose to the strongest in 19 months versus the yen after Japan’s main opposition party reclaimed power in elections yesterday on pledges of increased fiscal and monetary stimulus.

New Zealand’s dollar touched a four-year high versus the Japanese currency on prospects the election will add to pressure on the Bank of Japan to expand easing as early as this week. The so-called Aussie slid against the U.S. dollar before the Reserve Bank of Australia releases minutes tomorrow from this month’s meeting when interest rates were reduced. Australian bond yields touched three-month highs.

“We had a very large lift in the dollar-yen and yen crosses after the election result,” said Joseph Capurso, a Sydney-based currency strategist at Commonwealth Bank of Australia, the nation’s biggest lender. “The RBA minutes are likely to put a little bit of downward pressure on the Aussie because they’re likely to indicate the RBA is still open to further easing.”

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“China said it will seek a higher “quality and efficiency” of growth next year, signaling new leaders may accept a reduced pace of expansion in exchange for a more sustainable model.

There was no mention of seeking “relatively fast” growth, a policy in place since 2006, in a report yesterday by the state-run Xinhua News Agency after the annual central economic work conference in Beijing. Leaders vowed to target “sustained and healthy development” as they maintain a “prudent” monetary policy and “proactive” fiscal stance, Xinhua said.

Chinese leaders assuming power in a once-a-decade handover to be completed in March must decide the pace of market-driven change to boost consumer demand and rein in the role ofexports and investment. Communist Party chief Xi Jinping, who made the case for restructuring during a visit to the southern Guangdong province this month, faces an economy likely to have grown this year at the weakest rate since 1999.

“Now the focus is firmly on reform for next year and the future,” said Shen Jianguang, Hong Kong-based chief Asia economist at Mizuho Securities Asia Ltd. “The key to watch is how fast the new leadership will proceed with the real tough structural change and reform. Many of these are easier said than done.”

Even so, “next year is considered a vital year for the new leadership,” so the government will not allow a so-called hard landing in growth, Shen said.”

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“Emerging-market stocks fell, snapping the longest rally since October 2011 for the benchmark index, as Apple Inc. (AAPL) suppliers tumbled on iPhone sale concerns and the U.S. budget standoff reduced risk appetite.

Hon Hai Precision Industry Co. (2317), which assembles iPhones in Taipei, slumped the most since April. OAO Mechel, Russia’s biggest coking-coal producer, headed for the highest close since October 24 after a report signaled manufacturing may expand at a faster pace this month in China. Polskie Gornictwo Naftowe i Gazownictwo SA rose to the highest since April 2008 after UniCredit SpA upgraded the stock.

The MSCI Emerging Markets Index lost 0.3 percent to 1,039.37 at 10:15 a.m. in London, halting eight days of gains. The gauge has jumped 13.4 percent this year. Apple suppliers slumped after Citigroup Inc. cut estimates for iPhone shipments and downgraded the Cupertino, California-based company’s stock rating. U.S. lawmakers haven’t reached a deal with two weeks remaining to avert more than $600 billion in automatic spending cuts and tax increases, known as the fiscal cliff.

“It’s been a good run,” Aurelija Augulyte, emerging- markets strategist at Nordea Bank AB in Copenhagen, said by e- mail. “Fiscal cliff still remains a concern, so investors would rather take profits now.”

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“The yen fell to the weakest level since April 2011 versus the dollar after Shinzo Abe’s Liberal Democratic Party won Japanese elections yesterday, giving him a mandate to act on pledges of expanded monetary stimulus.

Japan’s currency weakened the most in more than a month against the dollar before paring its declines amid speculation traders were reducing bets on a further depreciation. Abe has called for the central bank to double its inflation goal to 2 percent and undertake unlimited easing to revive economic growth. Bank of Japan (8301) policy makers meet on Dec. 19-20. Sweden’s krona climbed against all of its major peers before the nation’s central bank sets policy tomorrow.”

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