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January 13, 2005

Apple, My Eye

Earnings season is upon us, and the last two evenings have given us two strong reports from bellwethers, Intel and Apple. Both exceeded expectations, or so the press tells us. The reaction to Intel’s news was lethargic, though Apple managed to rattle off a 7% gain. Nevertheless, these announcements did not instigate a new, superfluous rally in the market.

Other tech leaders such as eBay and Yahoo were off 4% and 2% respectively. In fact, today’s late afternoon sell-fest redeemed some bears who were biting their fingernails earlier in the afternoon (as a side note, bears are almost always biting their fingernails). The crystal ball here says there is a lack of buyers in the market. And good earnings reports typically come at the beginning of the reporting period. Wonder what’s in store for us when the bad reports start coming out?

Perhaps today’s slide was lubricated by the 4% rise in crude oil prices. Perhaps it was a late reaction to yesterday’s trade deficit number. Perhaps both. It’s impossible to say for sure. When the market wants to go one direction or the other it will grab onto and twist whatever facts are conducive with its desire (just like my girlfriend does when she wants to make a point). Our recently profiled Pfizer was off 3% today... still waiting for an attractive entry point.

Precious metals held their ground today, though the stocks gave up between 1-2%. Recently, the stocks have lead downward moves, so I'm holding off on any PM purchases for the time being. However, I am closely eyeing Newmont Mining and Pan American silver for inflection points.

Author’s Disclosure: Short YHOO. Short INTC. Long PAAS.


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