Apple Misses, Stock Plummets Until Noon

By Tom Luongo in Gold and Oil News, Shares and Markets | October 26, 2012 22:53 | Tags: , , , , , ,

The hedge-Fund Hotel known colloquially as Apple (NASDAQ:AAPL) missed both its top and bottom line numbers in the 3rd quarter and the stock dropped intra-day to a low near $590 per share.  A small amount of short-covering after noon pulled the stock back over a 6 handle to close at $604.00.  The thing that has to be made clear here is that Apple and Google are both so big now that just manipulating those two stocks prices can literally move the S&P 500 and the Nasdaq in whatever direction the headline writers want those two indexes to go.  Apple’s chart looks very heavy now and if the stock holds in this price range through the end of the month this would be the beginning of at least a consolidation move in the $550 – $700 range.

The 5 week downtrend Apple is currently is is extremely rare so odds are good for a positive bounce next week which will improve the odds of a middling November as bulls will look ahead to the holiday season ahead of tax-selling in December.

As for their earnings numbers, margins continue to erode and CEO Tim Cook’s trash-talking of his competition, namely the Surface- whose unveiling filled Times Square last night – and the 7″ tablets from Amazon and Google should not sit well with investors.  This on the heels of a Q2 call where he admitted that India was ‘too hard’ a market to compete in.  Translation – “We won’t sacrifice pricing to sell iPhones to 1 billion Indians.  We’ll leave that to Nokia.”

And Nokia are doing just that.  Watch the smart phone numbers in India over the next 2 quarters where Microsoft is strong institutionally.  It will likely put Apple to shame like they are getting their clocks cleaned in China by Samsung and local producers.


About Tom Luongo
Tom is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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