Further on Wednesday we have a slew of earnings reports from some of the best companies out there so we could have a good psychological day. Monsanto (MON) on the agriculture side, Nike (NKE) on the global brand side, Oracle (ORCL) on the big cap tech side, and Research in Motion (RIMM) on the must have gadget side. So it is quite easy to get overly negative here, but nothing in a straight line (even if you are a full blown bear) - we should expect head fakes along the way, causing pain to whatever side of the tape you are.
Nothing straight down, or up. Unless you were in the thicket in January 2008 - when in fact it was straight down. Aside from Oracle I could see the other 3 companies really having some major positives so that could set the mood brighter tomorrow and Thursday AM. Unfortunately it's always impossible to gauge the market reaction to Uncle Ben and crew so thats an unknowable variable.
With that in mind, I've cut some short exposure into this morning's tape and also am adding some Apple (AAPL) with halo effect via good results in Research in Motion (RIMM) in mind. The stock is trading around its 50 day moving average so it's pulled back to a first support level, and it's a solid place to begin to rebuild. Much like any purchase at this point, I am going slow but for now Apple is back up to a 1.4% stake. I would still like to ultimately add Apple in larger scale in the $160s (or $150s), but $174/$175 is a decent beginning. I do still believe it will go lower however over time - this is a classic double top forming - and there is a nice gap in the chart around $156
Again I've been struggling to find new technology names that actually have secular growth over 15% annualized, so my first preference is simply to add to the few names we already have in the portfolio, but I wanted to see lower prices, so we are starting to get some of that now. When money does come out of commodities (and for all you doubters - nothing straight up - it will happen at some point) it will flow into other areas so we want exposure there too.
Once we get through these earnings reports, will revisit the mood of the market Thursday around noon. Or if good reports are met with selling that would be another strike against this market. Between now and mid day Thursday the mood will be news dependent, and how people react to said news. Volatility ahead....
Long Apple, Research in Motion in fund; no personal position
15 comments:
Reserve bank of India hiked interest rates, just now.
Inflation, inflation inflation!!
no inflation in US..we are lucky..;)
Wow. Again? they just raised rates earlier in June. That's 2 shots in a 3 weeks - its sort of like Dow Chemical raising prices every 4-5 weeks.
We are *so lucky* there is no inflation in America... instead we can keep rates low so our banks can try to hobble together a business. :)
We are indeed a blessed nation. Inflation free to boot.
yes they did it again..and said "inflationary pressures are too high and use monitory policy if needed in future".
http://tinyurl.com/4zavm7
I passed an Apple store in the "Westchester Mall" yesterday about 2PM and it was packed full of people, buying. Every other store in the mall was EMPTY! So my takeaway is that they are selling whole lots more than iPODS and iPhones. This could be setting up for a spike higher.
yankee, I'm very confidant of their business. Just worried about the stock.
It is sort of like what is happening in retail as a whole - people get excited about sales in Walmart, Costco, Big Lots, and try to parlay that as a reason to buy JCPenney Kohls
Even today Kroger reported good sales - and people want to parlay that into a recovering consumer. No, its a consumer shunning restaurants but still needs to eat.
As people cocoon in their staycations I still expect video games, Apple stuff, TVs etc to sell. Its just a downshift in lifestyle.
That said the stock is not the business so there is always risk, but you just have to buy the fundamental good businesses when they pull back and over time you will make out. The company is quite amazing and again Macs are the real story here for all the fuss about the other nice things they have going.
bought QCOM on the pullback today myself. benefits from both AAPL & RIMM.
also fyi came within 1 cent of my next MOS order hitting... so keep an eye on that, closing close to the lows. POT's holding up slightly better and still has a ways to go til it hits my order
Nice place to try a trade there on the 50 day on QCOM
Will be interesting to see how investors react to these earnings reports
RIMM has NOT pulled back so seems vulnerable to me. Hence why I went with AAPL.
Frankly the safest stocks right now appear to be homebuilders - I mean what other bad news could come out? the stocks are decimated. hah.
As MOS goes, so will follow POT. MOS chart looks like a rollover. Wouldnt touch it til it gets to that 50 day down in mid 130s. But I'm greedy like that.
but don't forget the EIA crude numbers at 10:30; could be a minor blip in what is looking like a very positive day
got my [reduced] stimulus today, think I'll mosey on down to BestBuy and look at a pair of new flat screens. getting too old to look at the small font on these 17's
just doing my part to salvage HeloBen's legacy
Mark,
higher interest rates are not good for growth, I'm talking about India. not good for stocks, then how to profit from higher rates?
other than shorting stocks..
Any ideas?
Yes it will make it tougher in a general sense. I just think the emerging economies are going to have some rough times ahead with growing inflation. Their "middle class" (newly formed) is not immune - however many in China and India have been getting 10-15% wage increases so they can handle it better than Americans. But its generally not a great thing for stock markets so the best solution might simply be time. Let corrections play out and when we come out the other side of things you'll be able to buy China/India at very nice discounts for the next major bull run.
I still have a few names in both but not overweight. This is probably the case people are making for US stocks in fact - everyone used to hide in foreign stocks the past 15-18 months. Now if that goes away, where next? Can't do 15 year bear market in Japan. Can't do Europe. So that leaves the BR of BRIC or the US/Canada?
I just think its going to be a tough investment era for a while here. Focus on individual stocks, not stock markets. Always some winners to be found but just buying index funds like anyone could do for China or Eastern Europe the past 5 years is not going to be the most profitable way.
IPI is do for a pullback up 50% this month. Good #'s on CLF u puplished
If the FED/Treasury wants to crush Oil/Commodities, look for a .25 increase in the Fed Funds and a comment about further increases. Market should immediately sell off but could rally big time shortly thereafter. IMO
That's what I would attempt
Who is to say 2% is the right number? It could be 3% . It could be 4%. It could be 1%. No one knows since its manipulated by a bunch of economists in a room as if they are "all knowing".
So for psychological reasons they could raise rates and put out strong language on inflation. Will 2.25% or 2.50% really be any different than 2.00%? No.
Are they that out of the box to think of something like this? Somehow I doubt it.
.25 would be symbolic but it would at least act as a change in attitude and cause those who are riding the oil wave to infinity to rethink.
Great call on AAPL. I sold off 3/4 of my position at 183 but didn't pick up any here. Any chance they both fall after RIMs report, or is AAPL off to the races here?
Mike, we are always at the mercy at earnings season of the gods.
I've seen stocks miss by 15% but gap up, and stocks beat by 20% and gap down. There is no easy answer - look at MON today
I do believe people will flee into tech if this "rotation" move continues which is essentially the reason for the BIDU/AAPL buys yesterday.
I think most stocks are at the mercy of the greater market right now. If we continue a downtrend once we through this oversold bounce, I don't think there will be safety in anywhere. So it might not be so tied to RIMM as just the general market.
But again for earnings, its like going to Vegas and betting on black which is why I generally pull back on almost every position going into earnings - its more a game for speculators.
Post a Comment