JUST LETTING YOU KNOW
Apple…An Amazing Story
Apple (AAPL) reported earnings recently and they missed estimates by a huge margin, and lowered by a huge margin. The stock gapped down on that, but didn’t go down any further and then went up another 17 today to 665 – a new closing high.
Apple now has the highest valuation of any stock ever…$623 billion, outdoing Microsoft from 1999.
There are two bets being made here:
- That the Price Earnings multiple for Apple is still in the teens
- The iPhone 5 is coming and I guess it’s going to cure male pattern baldness and hemorrhoids.
So the market, I guess, is frontrunning it. The stock broke out a little bit on Friday, followed through a little bit more today. Volume finally picked up today – about 1.6x average volume.
Amazing. In a normal world, companies that miss estimates and lower numbers get shellacked. I’d like to say that this is Teflon. But the fact of the matter is that when Apple has come out with a new product or a new version of an existing product, people trade in the old version to buy the new version due to the “coolness factor.” I gather that that’s what’s at work here.
That’s the story behind the Nasdaq and Nasdaq-100 right now.
When Apple gapped down, it gapped down to the 50-day moving average and that is where it held.
This is an amazing story that Apple transformed itself in the early 2000s and has come out with products that everybody has to have.
They got past Steve Jobs passing away and they’re still coming out with new products and now there’s talk about the Apple iTV. I have no clue at this point in time about whether it’s going to be a big one.
End of August
We’re getting toward the end of August and the last nine trading days have historically been on the upside. September’s usually not a good month, but you never know, as we’re heading into the elections. Still a very split tape, but there is a bottom line here:
Every major index moved above a little resistance recently has the markets have edged up. I like some of the action in the leadership here. I like that today that we were down a little bit and came back.
A market they can’t send down, will go up.
I think the technical condition here is okay. And as leaders show themselves and break out and get into new highs, and show great volume and price pattern characteristics — we’ll be on top of that.
Of course, markets are never easy as that. We have never ever had to deal with the yapping and the mouths and the political interference that we are seeing in this day and age. I was reading some stories about some top flight hedge fund managers that are just returning money because, “we cannot compete with the printing of money, the political interference and the like.”
Gold and Silver
As you know, we’ve had this thesis on Gold that I started talking about 15 months ago. And it’s pretty much been on target except we’d love to see that 148 on the GLD get taken out and wash out a lot of people. I just want to let you know in the near-term that if the GLD can break above 158, that would be good news for the near-term and we’ll probably get some higher prices.
Also, the past two pullbacks into the 50-day moving average have held.
Silver topped out way back in April of 2011. The SLV was 48 and it’s currently 27 and change. Just letting you know that the SLV has shown some real defensive qualities around the 25-26 area. What I mean by defensive is that they’re not letting it go below those levels. That’st what we mean. It happened last December. It happens two or three times in May, June and July.
And something else happened today that hasn’t happened in eons. Silver went above a little bit of resistance today, with a little bit of volume…not compelling.
So I’m letting you know that Silver and Gold, maybe hand in hand, want to pull a leg up here. Now, this has happened before. Silver in in a low last December and rallied up…and then crapped out again very badly. So we really don’t know what this is going to lead to. I’m just letting you know right that Silver made this little move today that means potentially means you’ll get higher prices.
I’m not recommending buying it. What do you do with this is up to you. I’m just letting you know what I’m seeing.
Regarding Gold, if you haven’t heard, we predict nothing and we know nothing down the road. We do know that at the end of Gold’s big bull market in the 1970s, it ended in a blitzkrieg to the upside…a climatic move that ended in January of 1980. The last final move started in ’77-’78…when up nicely and the final months went up four-fold and in the final weeks, doubled into a classic climatic run…a chart that topped it out for the better part of 20-years.
And that’s long term cycle work. The one difference this time is that Gold, when it topped out when into the bearish phase that we thought would happen 15 months ago, went down 15% from the high. So far, Gold has gone down 15% to 18% from the high. And I’m posing the question to myself, is that it? Why? Because the unprecedented amount of money printing going on, not only here, but in Europe where they’re promising to print a crap load of Euros in the coming months.
That said, if the GLD breaks below 148 at any time, expect some serious technical selling.
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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.