Wednesday, December 27, 2006

12/27/2006 Morning Market Comment

Apple Computer is a stock that's been featured in this space a number of times recently for the unattractiveness of its stock chart after having been one of the grandest of high flyers not only of the year but of the past several years. This morning it's taking a 4% beating ahead of the open in the style of many want out, only a small one door exit. The first sign of trouble was it's failure to move past the $100 mark; it simply it a brick wall in the low 90's in late November, consolidated only briefly and then headed south and never looked back. This morning the stock is sliding as stock options troubles are making headlines with the element that federal prosecutors are taking a look. (Where have we heard this script before?) While the stock is close to becoming severely oversold - what's that old saying about catching falling knives? And if this news of a possible federal "probe" has any merit (that word "probe" always reminds me of a visit to my urologist and the snap of the glove), this will be a long term cloud over the stock.

Otherwise, it's looking as if the late Santa rally has further legs with continued excitement over the Ford-Toyota talks; the sale of the Minneapolis Star Tribune for $530 mln and the recent slide in the price of crude. WTI down another 30-cents this morning as natural gas continues to lead the way lower on the mild winter weather. As stated yesterday, indeed there are red flag divergences (eg. breakdown in Dow transports, QQQQ; low put to call) but as long as the S&P is able to remain above its 30 day moving average, the bulls seem good to go.'s 2007 Unstrung's Look Ahead is worth a read (Click Here). Among the predictions: Sirius Satellite could be bought out and that Time Warner could be the buyer.

It's likely that next Wednesday markets will be closed in observance of the death of former President Gerald R Ford. We'll see what the regulators decide. Monday is already a market holiday for the New Year Holiday, so a Tuesday close is highly doubtful. Kudos, by the way to Reuters, for including the ticker symbol F, for Ford Motor, in one of the early obits of the former President... you can't make this stuff up.

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