Wednesday, January 17, 2007

Evening State of Play

Judging by the more than $5 slide in Apple from the highs of the after hours trading, it looks like a top may be in place near the $100 after hours high for the time being. 2nd quarter guidance below street estimates by up to 4c a share on the bottom line is what keeps a high flyer flying higher.
First it was Motorola's warning, then AMD confessed it's number would not be up to par; yesterday Intel disappointed and now Apple. The baton next goes to HP and it's numbers on Thursday evening. Open interest in the AAPL Jan100 calls was over 100k... wow, a lot of folks are going to get wiped out (at least in that speculation). The long standing technique that Apple is deploying is the opportunity for the faithful to buy more shares are lower prices - something called "buying on the dip". If the past is any indication, as this latest earnings report becomes a distant memory and Apple repeats its pattern of beating its lowered guidance, the shares will rally enough anew.

Tonight, S&P futures are down by 1, Dow futures are slipped by only 5.

GE is close to buying a unit of Abbott Labs (Click Here).

What's up with Pfizer? We know the company's recently installed CEO will detail restructuring plans next Monday, but what was with all the trading in the Jan27-1/2 calls today with only a few days before expiration? The heavier volume in the Feb 27-1/2 calls makes sense for the news expected on Monday. Monday I believe is also earnings day for PFE. Stay tuned. Rolling from Jan to Feb? Not when Jan is bid at Zero and Feb 27-1/2 is offered at 35-cents.

Crude oil - the dead cat go some more work out today. 9 day moving avg stands at $53,68... can the bulls do it?

The amount of control the crude bulls will have to work with will depend upon the DOE and API data out Thursday at 10:30 ET. While crude draws tumbled, the increase in gasoline and distillate was enough to cast a bearish pall over the market. The Saudi's not calling for additional emergency production cuts is also a huge advantage for the bears.

Gold rallied again Wednesday and is diverting my attention away from energy. EuroFX has been drifting at around $1.30, but gold has been rebounding nicely. $634 was resistance today but $640 sure looks like the next level.

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