10/25/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST
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https://archives.warpradio.com/btr/InvestorsEdge/102518.mp3
JUST LETTING YOU KNOW
We’re now really getting past the meat of earnings season. And to say the least, reaction has not been overall on the thrilling side.
Apple
Next quarter, the consensus expectations had been for Apple to come out and do 15.5 bucks vs. last year’s 13.87, which is not a great growth rate. Apple now brings that down to 11.75. So Apple’s trying to tell us that for the Christmas quarter that earnings are going to be down 2 or 15%. Do we believe that BS? Well I’ve got news for you, if the market believed it, I think Apple would have been down 30 or 40 in the aftermarket. Instead, it was down only 8.
If Apple isn’t BS’ing and earnings are going to be down 15% this quarter (and I believe them), that means Apple joins that non-growth stock brigade. That would be the first quarter in ages that earnings are down. But I have to repeat again, they’re liars at Apple. They sandbag. They have for years. There have been times where they lowered the number by 2 or 3 bucks and beat the number by 2 bucks with a difference of 5. That should have an SEC investigation.
There’s cheating both ways.
The Market
The Dow was up and the S&P was up…small amount, nothing big. But a phenomenon continues to go on that is not good news. And that is more and more names cracking. The leaders of the prior up move – cracking. And that’s usually not a good sign, ladies and gentlemen. If I have to use the work “cracking,” it is quite the meaningful thing.
Ladies and gentlemen there are just too many major breaks in the market.
We have watched DuPont – major break
IBM
…a whole host of names – on earnings.
I’d say the only thing going on is that, they’re all very oversold and they can bounce, but I’m just letting you that there are a lot of major breaks.
And you know I keep this growth stock list, which are stocks showing great strength, trading above the 50-day/10-week moving average, keep ascending…leading the market.
I think I’m down to four names. That’s not good news.
So we’ll see what happens. The market remains under a little bit of pressure.
If you’re going to do things by the book, today was Day 1 of an attempted rally and we’ll see if we can get a Follow-Through Day starting on Tuesday. But, the market’s losing a lot of leadership.
What does the market have going for it this second? It’s oversold, which just means it has come down kinda far kinda fast…and you get bounces off of that.
Also the Nasdaq is sitting on the 200-day moving average, a place where typically it’s going to get defended. But every major index is now below the 50-day. And remember what I’ve taught you. Nothing good happens if you’re below the 50-day moving average.
Only bad happens if you break below the 200-day moving average, which is just underneath here.
And nothing bad can happen if you’ve the 50-day moving average. We’re talking physicality here, not opinion.
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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.