This is what the reaction to AAPL’s earnings has been so far. No, it’s not a crash, but the expectations were so high that it’s no wonder the reaction is a bit muted – more like a bump into a row of shitters. S&Ps are not reacting too negatively, but I think the table is now set for a change in sentiment for the near-term.
Yes, elections are coming, and so is QE2, but we should see some shakeout to keep the bulls honest. GS earnings in the morning and the reaction will be equally as interesting to watch. Financials are as unhealthy as ever (Citi manipulates results with loan loss reserves, etc.), and the market will not go anywhere without their participation, so let’s gauge real health in the market by the fin’s and by the dollar.
Below is the chart of the US Dollar. Looked good this morning but sold off a bit during the day. Still, a conditional change has taken place, and the trend line has broken….for now. I am expecting a 5-7 day advance in the US Dollar to retrace some of the recent slide. It’s healthy, and very much needed at this point in the game to allow set-ups to take place for the next move.
I am still of the belief that gold, silver, miners, etc. are the place to be for the forseeable future. Stocks will initially take off as the pause allows a reset later this month, but long-term risks of hyperinflation loom and even the best (AAPL included) will suffer.
Trade the extremes and pay attention. The rest of October could be fun.