Tuesday, January 18, 2011

Earnings Rush | January 18, 2011 Via Economic Burn

originally posted 8:49 am @

Financial news and commentary from those embedded deep within the industry

Earnings Rush | January 18, 2011

sjobsThis is a hell of a week. First the Jets beat the Pats, now Steve Jobs goes and pulls this shit a day before Apple (AAPL) earnings when I’m long a shitload of March calls. Not cool.
Suffice to say, I woke up early on MLK day and decided to look at the futures. My iPhone went off 2 minutes later with a message from CNBC RT announcing the Steve Jobs news. I immediately began shorting /NQ (Nasdaq 100 Futures) and watched as it traded in a thin window an hour after the Jobs announcement. With Apple’s earnings today, I am confident the company will kill it and I will be safe. Goldman Sachs (GS) and Citigroup (C) also report earnings this week – nothing to mess around with. I am long Goldman.
I remain long oil with OPEC refusing to boost output. I own UCO calls and am long /QM. Lastly, emails will be brief later this week as I travel around. I am sure I will see many of you in Chicago. Oh, and enjoy the picture of Brooklyn Decker in today’s newsletter.


Talk about perfect timing… Jobs back health back in question, pr of course by design released while
cash markets are close the day before Apple releases their quarterly EPS. Typical BS, though this is the market were closed, though we all have come to know and we must embrace these shenanigans. Thought in regards to apple’s situation I think honestly is the best policy with shareholders and I do believe they should be given a bit more information.
Globex traded till 11:30am, nasdaq off 30 handles at one point.. Germany Apple stocked traded down over 8%….How perfect the timing..They are pricing in a 5-7% move down in apple stock tomorrow, the 325 level is going to be key.
The ultimate circuit breaker… The issue must be serious, Yesterday's news could have been released sunday or any other day, but it was not..I think the issue with jobs is serious....
Also take into account when trading this week..... Apple reports EPS today after the bell and the coming week is a shortened trading week with OPEX friday..
side thought..
*In my opinion the perfect timing for the Jobs news would be about 10 am friday morning after the stock has traded post earnings with volatility priced more accurately. you know… Goldman Sachs style..


This is the first day this yr im excited about the trading prospects.  AAPL is leaning on the Q’s and GS came out and said the spoos look a little over done here between the 2 this looks like we could have some serious pressure on the mkts.  I have to agree with GS and welcome this pullback should we get one.  My longs have been diminishing over the course of the last two wks in preparation for a pullback.  Something i pointed out in previous notes is the return of volume on the exchanges come the 3rd wk in january and that looks like exactly what were in store for this is where the spx turns into a dog fight all the rookies thought it was going to be a steady sail to 1350 and this mo was going to be in the bag for the bulls not so fast.  on SPX watch the 20 day 1267.35 breaking that brings us to the 1260 support below that support roughly sits around 1240 along w the lower bollinger band 1233 is the 50 day.
To break down AAPL, we’re sitting on the 20 day right now but a trip to the 50 is quite possible dwn around the 321 area…. should we break that area of support the lower bollinger band sits 315 and the next stop would most likely be the 300 area… should this sell off in broader mkt extend itself the 280 area on AAPL isnt out of the question.  that all being said this thing is a screaming buy on the pullbacks.  i was in an AAPL store over the wkend and it was like black friday in there w all sorts of bags walking out the door.  Fundamentals are def. intact.  As for earnings id expect a pop on the release but would not be surprised in the least to see a fade of that pop very shortly after.  Watch some of the high flyers like ARMH KLIC NVDA for pullbacks as well along w AAPL.  This mkt isnt done rather its just getting interesting!!!
Happy trading.
-The Economic Burn Team
Today’s Trades:
The Mint: Long oil via /QM and UCO calls. Long AAPL on the low and into earnings and long GS this week.
Sellputs: Long ES after dust stettles from aapl volatilty off open. Long AAPL off open.
The Rodeo: As for specific trades, I’m not a fan of shorting things w great fundamentals so id steer clear of AAPL short but the Q’s would cover you there.  In general, the wish list for your longs that you have build over the last few weeks is going to come into play so break it out and hold on.

Today’s Hot Links:

08:11AM S&P futures give up gains after Citi results
08:09AM Fed Officials Signal Growth Pickup Won’t Alter Bond Purchases
08:08AM Citigroup posts $1.3 billion quarterly profit
08:04AM TD Ameritrade First-Quarter Profit Up 6.5%
07:59AM London Markets: Burberry, SABMiller and miners boost London
Please follow on Twitter! You won’t regret it!
Follow EconomicBurn on Twitter