10/26/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST

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http://archives.warpradio.com/btr/InvestorsEdge/102618.mp3

JUST LETTING YOU KNOW

It was not the most thrilling week. And it was not the most thrilling end of the week. But markets do not go straight up. They do not go straight down. But, for sure, quite enough has happened in the past couple of weeks that gives me some pause.

Remember what I said to you last Friday. It is not a good sign that we’ve had multiple distribution days and the past two weeks prior to this week, many indices finished at the low of the week, which usually leads to some lower prices.

Well, we got some lower prices this week. Not the end of the word, but I must tell that there are a lot of stocks breaking. The good news is that there are still plenty that aren’t.

But to be clear, it’s going to tougher going forward, even when we rally up a little bit, which I suggest could happen at any time.

Apple

Apple finished down 5.5 today. But I would tell you that Apple, at one time today, was down about 18. Volume was heavy. Just want to let you know about something that occurred today. It’s not bearish or bullish. It’s really nothing. And was really surprised. I received a bunch emails saying, “You gotta buy Apple now.”

Even though Apple is under nothing but distribution, trading below the 50-day moving average, trading below 150-day moving average and just holding the 200-day…I got a few too many bulls coming out of the woodwork today.

When you have a chance go look at the weekly chart on Apple, which typically will go back 5 years.

And you will notice that the Apple has been contained, on a closing basis, above the 40-week moving average since April of 2009. Now you have the flash crash in May of 2010 and it went right down to it on the crash. In June of 2011, you undercut it one week, but finished on it. On the week of October 7, 2011 and held. On the week of November 25, 2001…same thing.

So it will be important of Apple to hold that 40-week moving average. I would suggest to you that it’s around 598-ish.

As far as the numbers are concerned, I looked at them. Let me just stay this. If the market believed Apple and their guidance, the stock would be down another 50 points. The market doesn’t believe any of it.

They’ve done this before. They’ve come out and lowered guidance 20 to 30 percent. And the criminal analysts just fall for it on purpose because they know that beating Wall Street estimates is just so important. And it’s an easy way to beat Wall Street estimates. Just set it up to beat it.

So Apple took their guidance from 15 and change to 11 and change. They better beat it handily because the market is expecting 15 and change for this quarter – Christmas.

They will have more of the iPhone 5 in the quarter, as well as this new little iPad and we’ll see how it plays out. But right now, as a stock on a technical basis, Apple’s in no man’s land. Probably got sold out a little bit today after dropping from 705 to 590 over the past four weeks.

Amazon

Amazon finished up today about 10 bucks on a 23 cent loss for the quarter. And sales lighter than expected. Last quarter’s earnings was 1 cent vs. 98 cents. The quarter before was down 36%. The quarter before it was down 58%. Revenue growth, the last four quarters 35%, 34%, 29%, 27%…a deceleration, but not the end of the world.

 I don’t know what to make of this stock. I must tell you, I bought it on the last earnings report when it broke out perfectly and I made some decent cheese and got out near the highs. But it really wasn’t a big move.

And I here, I just don’t know why the stock would react well to this report. The story goes with Apple – they’re spending a ton of money building out. And when they start building out, their earnings will be huge. I got news for you…they better be!

This quarter that just ended was the worst quarter Amazon’s ever had on earnings. So time will tell. Amazon is also in no man’s land between the 50-day and 200-day moving average.

And there’s nothing to think about or so here.

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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.