AAPLTalk, Pre-Market Thoughts for Week of 9/30/13: Bad News Bears?

As we head into Monday, there’s a raft of…not great economic and political news weighing on both the futures and pre-market, with AAPL being no exception (being currently down over 1% in pre-market).

The headlines are easy enough to find and there are far better commentators on the stories and their underlying issues than myself.  So let’s just take a quick look at where AAPL’s been the past few days and hopefully there’ll be more clues in the days ahead.  While the Apple/AAPL story itself was at least kind of turning around after the test of 447, the market is souring in a significant way just as we head into a period of very poor visibility and high uncertainty.  None of those really relates to Apple much, aside from general worries about the world economy which obviously relates to consumer spending, but suffice it to say that waves of overall bad sentiment are more than capable of testing stocks with great charts and great stories behind them.  And while the intermediate chart isn’t too bad for AAPL at all, it’s still very much a stock trying to regain footing and market leadership after quite the multi-month fall.

Hourly chart:

aapl-hourly-092713close

– AAPL was looking to re-establish something of a bull flag formation, albeit still declining, which obviously can only go on for so long before the bullish hypothesis looks increasingly dubious.

– There’s also the potential reversal signals as far as a strange kind of inverse head and shoulders formation that looked around 3/4 formed as of Friday.  Unclear what Monday will do to that thesis.

– AAPL was looking to fight its way back into a “more aggressive” (really, more constructive) parallel channel (light blue).  I’ll be using that as a potential bull flag tracker from here on in.

– AAPL ended the week holding the gap from Sep. 20 (at 467), but getting closer to the intraday top/resistance for that same day (478.55).

– Overall, a controlled move, but without any bullish follow-through as of that point.

– There’s very little recent price history in terms of the huge bullish move from around 475 after the Carl Icahn tweet.  There’s actually a small gap around 478ish-480ish that AAPL filled in pre-market, with some recent micro resistance around 475.

Daily chart:

aapl-daily-092713close

– A wedge might have been said to have been forming (see red descending trendline and gold trendline), but the eight days of action well below the wedge do cast doubt on that formation theory.

– MACD-h crossed over into positive territory, but there was no real sign of micro uptrend, aside from the strong bounce from 447 when MACD-h was negative (albeit sloping upward).

– Volume really dried up on Thursday and Friday – my guess is that’ll change on Monday as bears attempt to make their move against the backdrop of a highly skittish market.

– 465-467ish (as a resistance zone that’s more recently been more like support, and also the general region of the 38.2% retrace of the overall intermediate uptrend from 388-ish to 513-ish) could be an interesting price area to watch (horizontal green line and dashed Fibonacci retrace level).

Where AAPL will go from here, who knows, but bullish market participants would be well advised to buckle up, so to speak.  Monday could be a really wild day.

AAPLTalk QuickTake, 9/23/13 Market Close: Return to Relevance

A somewhat tongue-in-cheek post title today, as Apple blows away most everyone’s projections with a very good “over 9 million” iPhones sold in the opening weekend (who cares about channel fill, really, it’s not like Apple has a reputation of stuffing the channel).

Combine that number with 200 million iOS 7 upgrades and a (somewhat amusing) clarification that guidance will come in at the upper end of projections, and you get one heck of a day.  Yup, another maddening gap up, but a statement-making one which is a nice change.  Congratulations to those who bet long in anticipation of today – wish I had, but I’d assume there’ll be other opportunities for tactical trades, hopefully with better visibility.  AAPL appears to be back in play, while the angry mob looking to drive Tim Cook from Cupertino and/or declare Apple doomed (any day now!  Just watch!) is quieted for the time being.  As if “Timid Tim”, as some call him, was really in grave danger of driving his company into irrelevance on the basis of a single day’s announcement.  Maybe it’d be make-or-break for other companies, but not Apple, not today.

So, how are those hourly and daily charts looking now?  (Remember, just click for full resolution.)

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AAPLTalk, iPhone Fall 2013 Launch Weekend: Looks Like Monday Sets the Tone

(NOTE:  Charts are viewable in much larger sizes than thumbnailed.  Just click to see the full resolution!)

Which…probably doesn’t come as a surprise, but it’s nonetheless a form of “comfort” (however meaningless) to know where the inflection points are.

If only we had the slightest of clues how Apple will weather the Third Trial of Sentiment (initial weekend sales and maybe pre-order numbers, assuming Apple decides to release this info in the first place).  This time around, we don’t have any.  And neither does Wall Street, considering that AAPL ended the week about where it closed Monday.

Around this time last year, Apple reported sales of “over” 5M iPhone 5 models in the first weekend, and over 2M in the first weekend of sales in China three months later.  Analyst estimates are all over the map for this year – 6M, 7.75M, take your pick.

Expectations are high in any case.  In my humble opinion, news from Apple on Monday could fall into one of three categories:

(1) Apple made “enough” iPhones (including 5S) to address the demand spike, and reports a number in the 7.5-8M range or better, maybe adding in some commentary on pre-orders yet to be filled if they feel the need.

(2) Apple didn’t make enough iPhones to meet demand (which is clear from the 5S, based on shipping times) and reports actual sales numbers with additional pre-order numbers and context.  If Apple goes this route it’d be hard to see how they don’t explain the “shortfall” vs. the 7M “baseline” in 2012.

(3) Apple says nothing, except maybe something about “incredible demand” and “we’ll try to meet it as soon as possible”.  Which would inevitably raise the questions of whether Apple is having immense trouble ramping up the 5S, and whether overall demand is actually lower than last year.  Now that would be a fun scenario for AAPL bulls (currently including myself), wouldn’t it?

Anyway…talk about something that no one outside of Apple could even hope to predict, or maybe even react to given the incredibly “disconnected” way AAPL’s been trading recently.  I’m sure some extra-savvy/extra-brave traders have placed bets in anticipation of Monday – but even they must feel it’s a coin toss on some level, I’d imagine.

Quick look at the hourly/daily charts.

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My iPhone 5S and 5C First Impressions

I had a chance to check out the iPhone 5C and 5S at the Apple Store today. Gold supply apparently was absolutely pathetic, a common refrain from anecdotes I’ve read.  Raffi would not be amused (Conan O’Brien reference).

Since I’m not a buyer – just yet anyway – I was more interested in the demo models then supply levels (there’s far better sources on that than li’l ol’ me anyway). Random thoughts (not really in terms of market/Apple implications):

iPhone 5S

Touch ID is blow-away amazing (yes, I just borrowed a Forstall-ism).  Just as long as the assembly is reasonably good at keeping out dust, oils and moisture – time will tell about the quality of the design. For fun I tried to see how quickly Touch ID could register my fingerprint – even with some “retrograde” reading mistakes, you can quite easily get your print locked in in less than 20 seconds (on the second or third registration try). The 5S uses the vibration motor as a tactile aid to get you to re-tap the home button as the sensor works on recognition (kind of a “OK, I got a good mini-read here, keep going”).  And if you’re doing it wrong, you get zero tactile feedback and those red/watermelon-colored fingerprint “progress” lines “recede” (you do get some helpful tips).

5S speed and responsiveness – somewhat faster, but not the 4S >> 5 delta I was expecting. On the other hand I won’t be able to “put the 5S through its paces” with my apps and usage patterns just yet. My wild guess is that iOS 7 could benefit quite a bit from some optimization, but who knows if that’s a priority – the 5S is more than fast enough, and the 5C runs fine enough.  Startup time was around 25 seconds.

The best way to see the power of the A7/ISP in the demo context at least is the 720p/120FPS mode. Refresh rate on the screen and smoothness of the instaneous vid capture is STUNNING.  Actual video is “mundane” (read: the usual) at 30fps by comparison.

The home button is sleek and discreet on the 5S Space Gray – perfect for me.  The steel ring is “concave” and helps semi-imitate the old Home button feel.

iPhone 5C

Pure eye candy.  I was surprised by how much I liked the watermelon color – and it really is a watermelon color, it just doesn’t “market” as well to call it as such I guess.

There’s a slight “imperfection” around the camera/flash assembly.  By that I mean there’s the tiniest bit of circular “gap” between the camera lens and flash assembly and the back case, probably to provide a tiny bit of tolerance in the fitting process.  That’s the only real sign of “cheapness”. The only way to tell the plastic casing is plastic, other than by look, is by tapping it with a fingernail – build quality is otherwise very good, with a bit of give but interestingly not in an unwelcome, fragile-feeling way.  It’s actually a bit like how the iPhone 5 feels the tiniest bit less “solid” than the iPhone 4.

Anyway, the quality of the plastic casing is “what iPhone 3G/S always wanted to be”, in my opinion.

The iPhone 5C feels like it could be a bit “slick” in the “wrong” conditions, but it’s a great balance between shine and secure feel at least in “ideal”, Apple Store-like low humidity (and this is an iPhone that’d seen lots of interested customers throughout the day).  It doesn’t feel too heavy OR overly dense.  It’s like a shell with surprising substance behind it, and you would never know the metal reinforcements were there.

It’s an awesome form factor overall.  I suspect it’ll be a bit more popular in China than many people think.

AAPLTalk Late Night, 9/18/13 Market Close: ??? + QE3 = Two-Day Bounce

Gaps in logic, gaps in price – I just can’t figure out AAPL’s price action one bit lately.

Hopefully I can provide some mild entertainment to go with the usual charts.

Did those overall nice reviews of the iPhone Fall Collection (including iOS 7) cause the gap up this morning?  Er, maybe?  I suppose it was nice to see an apparent connection between the Fed’s delay of any tapering (for all practical purposes, at least through the next several months?); the market having a stimulus-fueled rally; and AAPL re-finding its footing as the 460 level beckoned.  I know, price action over all else, but things at least seem to make more sense when there’s some correlation between the broader markets and AAPL.

So, we went from 506 to 450 and back to around 465 in about a week.  Not great for anyone but opportunistic traders, really, but it certainly beats the alternative.  And today’s relative strength was much more impressive than yesterday’s uninspiring 5-point bounce.

We’re less than two days out from what I call the Second Trial of Sentiment – starting Friday, iPhone launch day.  Of course, long lines are a given.  (After all, Apple isn’t that doomed, and there’s only 400-ish stores worldwide and nowhere near enough supply-constrained iPhone 5S units to go around).  How long after 12:01AM Pacific time until iPhone 5S pre-order times slip and brick and mortar supplies run out?  How will Wall Street react?

Onto the hourly/daily charts. Continue reading

AAPLTalk Late Night, 9/17/13 Market Close: Are Strong iPhone Reviews Enough to Counter a Weak Bounce?

The day started fairly promising for AAPL, but momentum *cough* tapered off at the end, representing a 5-and-change-point bounce after a nearly uninterrupted, air-pocket filled 60-point slide.

Earlier this evening, iPhone 5C and 5S reviews came in, about as expected.  Which is to say, generally quite positive (maybe a bit better than I expected) with some quibbles here and there (as expected).  They’re easy to find so I won’t link to them here.

I didn’t think of the review phase as a “Trial of Sentiment” because iPhones have always been generally good-or-better-quality devices (much moreso for iPhone 4 and up) with good reviews, so there’s no real surprises.  Still, since the embargo lifted three days before launch, we get some kind of sentiment measuring point against that backdrop of iPhone 5S supply constraint worries and the conspicuous (though again, hardly surprising) lack of pre-order numbers from yesterday.

What’s that?  Tapering?  Forgive me if I didn’t mention it, the SPY is up maybe 2% while AAPL’s down about 10% in the same period.  It’s probably just me, but I’m currently proceeding on the assumption that AAPL’s trading in its own world of sentiment, disconnected from the broader markets at least for now.

All that said, moving onto a quick look at the hourly/daily charts.

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AAPLTalk Late Night, 9/16/13 Market Close: Monday, Monday

The return of the semi-bad semi-puns.  So what was behind today’s bearish action?  Sell the lack of news?  Some butterfly downgrades AAPL (sorry, I mean flaps its wings) in the middle of New York’s Financial District?  Whatever the case, AAPL’s currently in “any excuse” mode.  If it sounds remotely “plausible”, seems you can’t rule it out.

(So maybe I should start holding Apple to increasingly impossible standards.  Call it perma-disappointment.)

Anyway, that First Trial of Sentiment didn’t go so well, as Apple didn’t give out any pre-order numbers.  And it wasn’t terribly likely to happen, considering the lack of pre-ordering (and probably initial supply) for iPhone 5S.

Mark your calendars for Friday the 20th – iPhone launch day – and we’ll revisit the Trials of Sentiment later in the week.

Now for a look at the hourly and daily charts:

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AAPLTalk QuickTake, 9/13/13 Market Close: Is green in AAPL’s future, or just the rest of the market?

In case you haven’t checked the futures yet, the still-very-early read has the indices up about 100 basis points.  Whether it’s largely due to a geopolitical and/or “pan-economic” sigh of relief that things aren’t as bad as feared (we think?) or…something else (Larry Summers withdrawing from consideration as the next Fed? *shrug*), it’s a strong signal of optimism from early market participants.

Ordinarily you might think that this could filter down to names like AAPL.  But as you know, AAPL is in the middle of a huge period of expectations uncertainty – which is appropriate on some level I guess, since Apple’s two proudly announced new iPhones will likely account for about half of Apple’s revenues (and an even bigger share of its earnings).  I can sure take issue with the market’s reaction to its inflated expectations vs. AAPL’s worse-than-pedestrian 11.6 multiple, but maybe another time.

Apple’s now at what you might call “The First Trial of Sentiment” – pre-order numbers, or lack thereof, for iPhone 5C.  If you (were to) ask me (remember, total non-expert here, read the disclaimer and all that), it’s not terribly likely we’ll get numbers on Monday since iPhone 5S isn’t part of the pre-order/reserve-for-in-store-pickup mix at allat least for countries not as lucky as Hong Kong or China starting Sep. 17.  Take a wild guess on how the media will spin that.

Now, if that pre-order number turns out to be close to 2 million on the strength of iPhone 5C alone?  Or if there’s some impressive pre-order number over the whole weekend vs. a 24-hour period?  Maybe Apple will say something.  But no one outside Apple knows, which puts us right back at square one.

While we wait to see if Apple will or won’t provide iPhone pre-order numbers for the first time since 2010 or so (iPhone 4), here’s a quick, low-commentary look at a couple charts.

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AAPLTalk Late Night QuickTake, 9/12/13 Market Close: The Waiting/Expectations Game

As mentioned yesterday, I’m thinking AAPL could continue to trade even more unpredictably than usual for as long as several weeks.

Remember, Apple is just starting pre-orders on the second-tier iPhone, the five-color iPhone 5C.  First-24-hours pre-order numbers may or may not be issued by Apple next Monday – iPhone 5S isn’t part of the mix and won’t be until the day of launch (translation:  for opening weekend, it would appear that virtually 100% of iPhone 5S units sold will be at brick-and-mortar locations).  So there’s plenty of iPhone-related stuff for WS to process (and “act on”) in the next couple of weeks.

Time for a quick, low-commentary look at the charts:

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AAPLTalk QuickTake, Day-After-iPhone-Event-Disappointment Market Close: Are You Missing Something in These Charts or Have Bears Learned Teleportation?

I suspected AAPL would trade with high volatility and unpredictability for days or even weeks.

I mean heck, I started the AAPL Tree when AAPL was at its most recent intermediate-term trend bottom (the 380s).  I’m no stranger to wild downside trading.

Even so, today was a bit of an outlier, even by AAPL standards.  A bearish reversal day with as much or possibly greater potency (or at least surprise) compared to the day much of the world realized Carl Icahn had a Twitter account.

As I’ve mentioned before, with high unpredictability comes much tougher reads, even though my humble reads always look backwards by design.  So, for those couple dozen or so visitors who stop by (and thanks for visiting, my readership is now in double-digits :D!), keep in mind that commentary will be kept to a relative minimum.  My original intent with this blog actually wasn’t to update every day, much less with multiple charts, so updates may *cough* taper off here and there.  Though like I said, I started the AAPL Tree in the teeth of a downtrend.  This blog isn’t capitulating anytime soon. 😀

Now that that’s out of the way (not to be repeated in the future, much), today’s hourly chart:

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