Steve Jobs is taking a medical leave of absence (I wish him well in his recovery), which is starting a chain reaction in the markets tonight that probably can only be saved by JPM in the morning.
AAPL is trading down over $6 after-hours, which puts the stock right at the November lows. The stock market (Naz and SPX) are seeing a bit of selling after hours, but not nearly as dramatic. Because this is a company-specific news bogey, it will have some negative effect on the market, but not a huge effect.
Here is a chart of AAPL:
(click on image to enlarge)
(click on image to enlarge)
JPM has earnings before the open tomorrow, so if the company stinks up the report, then the Dow could see a -200 point type of day or more down into the 8,000 area. Keep an eye out pre-market tomorrow morning, it's really all on JPM, at least for the early part of the day. Remember, not every sector will drop dramatically if the market does, but if JPM stinks it up and the market sells down to 8,000 then traders will really want to see if the Bulls can hold that area. If the scenario above does play out and then 8,000 does hold, then the Healthcare and Defense stocks will probably hold their bullish bounces.
Also, INTC reports after the close tomorrow, so this is a bit of a weird earnings season with companies all out of line from where they normally report. Remember that INTC warned last week, which caused the stock and Tech to sell down in the current downswing. Usually, the way this game goes, is that INTC will now try to beat the "depressed" guidance and actually catch a tailwind. So what I'm laying out for you is a scenario that - if it plays out - is JPM misses and the AAPL / JPM selling knocks the Dow down to 8,000. Then traders hang out (just like they did today waiting for JPM tomorrow) and wait for INTC. If INTC doesn't play the game right and does even worse than their lowered guidance, then the Dow could take off down to the November lows on Friday.
I don't know what JPM or INTC will do to the markets tomorrow or Friday until we get the actual reports, but I would be ready for a "catastrophic" scenario just in case. If they beat expectations then we will probably get the turn back up in the current Broadening Pattern. This much I know, we will be in for a very interesting couple of days.
One final note for those of you thinking about refinancing mortgages. On a high credit score, the 30-year fixed bounced between 4 5/8 and 4 7/8 today with a lot of 4 3/4. The mid-day bump and hold of the market that I warned of in VC took the rate to 4 7/8 on the close. If we get a -100 or so Dow out of the gate tomorrow, then we will probably see 4 3/4 again. If we get a -125 to -175 or so Dow then we will probably see 4 5/8 quite a bit. And if we get a -200 or a little more Dow then we might even see a 4 1/2. Chew on that one if your thinking about refinancing. But chew fast because it might not stay there for too long.
Like I said above, no one knows what tomorrow will be until after the JPM report, so be ready for anything.....but make sure you are at least ready.
Also, INTC reports after the close tomorrow, so this is a bit of a weird earnings season with companies all out of line from where they normally report. Remember that INTC warned last week, which caused the stock and Tech to sell down in the current downswing. Usually, the way this game goes, is that INTC will now try to beat the "depressed" guidance and actually catch a tailwind. So what I'm laying out for you is a scenario that - if it plays out - is JPM misses and the AAPL / JPM selling knocks the Dow down to 8,000. Then traders hang out (just like they did today waiting for JPM tomorrow) and wait for INTC. If INTC doesn't play the game right and does even worse than their lowered guidance, then the Dow could take off down to the November lows on Friday.
I don't know what JPM or INTC will do to the markets tomorrow or Friday until we get the actual reports, but I would be ready for a "catastrophic" scenario just in case. If they beat expectations then we will probably get the turn back up in the current Broadening Pattern. This much I know, we will be in for a very interesting couple of days.
One final note for those of you thinking about refinancing mortgages. On a high credit score, the 30-year fixed bounced between 4 5/8 and 4 7/8 today with a lot of 4 3/4. The mid-day bump and hold of the market that I warned of in VC took the rate to 4 7/8 on the close. If we get a -100 or so Dow out of the gate tomorrow, then we will probably see 4 3/4 again. If we get a -125 to -175 or so Dow then we will probably see 4 5/8 quite a bit. And if we get a -200 or a little more Dow then we might even see a 4 1/2. Chew on that one if your thinking about refinancing. But chew fast because it might not stay there for too long.
Like I said above, no one knows what tomorrow will be until after the JPM report, so be ready for anything.....but make sure you are at least ready.
Holy Cow, I thought I was the only late-nighter. I held GILD and ABX calls and one JCP(JIC). My MHS calls that I sold yesterday looked pretty good today. Was there a sign I missed Dwight? But with my luck, I would have held UNH and sold MHS. How long can CNBC talk about and have guests to comment on Jobs? Put the old guy on a web cam so he can put us at ease..please. I think I may have missed a good VC. We'll have to catch up at dinner. Good luck everyone! Trade your puts off.
ReplyDeleteP.S. Dwight,
As a 2 finger typist, is there a way to eliminate "Word Verification".
Dwight,
ReplyDeleteSomething just came to mind. Do you moonlight as a mortgage broker? I don't recall seeing the 30 yr. good credit rate chart? LOL
Hey Gary and fellow late nighter!
ReplyDeleteStill holding my GILD and GG calls as well, stops were not triggered so here I am still.
Awaiting the outcome of tomorrow's big 'report'.
Good profits all.
Francis
Gary: Blogspot is what it is, so I just work around those things.
ReplyDeleteTo all: Once again, thank-you for your comments to one another and supporting each other as traders and even as friends. I'm glad that you share your insights with each other. Keep up the good work.
Francis,
ReplyDeleteJP beat!!I forgot to post my IWM call I bought EOD. Gilead and Gold(GG) and hopefully I don't get stuck with a RUT.
Dwight,
ReplyDeleteThanks for the post/premkt analysis. We'll miss your presence today and appreciate any input intraday if you're near a computer!
Joe,
Most of us feel your pain with the day trade rule. Also, I'm learning that if you don't feel comfortable about a trade, don't do it! This sounds pretty obvious, but there are times I become convinced that a trade looks good, but my gut's not confirming, and I've lost $$. I'm still learning a balance here, but if all things aren't "go", I don't do!
Gary and Francis,
I'm in the GILD with you (guild, get it). We're kind of like craftsmen, craftswomen(?), right? Only down a wee bit in GILD.
Gary,
Steve C. quoted mortgage refi rates on VC, Wed.; Dwight followed up w/ his own info. I guess he pays his bills!
Keep your sense of humor about the verification. Don't you know it's a test of mental acuity? How touching - this time mine was "wings"
Gary,
ReplyDeleteDon't you sleep?
Gary's on fire!
ReplyDeleteS&P futures mildly up from the lows of overnight, we shall see.
Can't be near the screens this morning so not placing anything new and keeping same stops on open stuff.
All the best to everyone!
Thanks Dwight for everything.
Francis