AAPL - another lousy month

Apple (AAPL) closed the day a little lower, but across the month, AAPL lost 14%. This is the biggest monthly fall since the collapse wave of Sept'2008. The monthly charts show no sign of the down trend ending, but a multi-month bounce into the early summer would seem very reasonable.


AAPL, daily

AAPL, monthly

Summary

Suffice to say, the near term trend is still downward - pressured by the more important monthly trend.

Yet, a multi-month bounce into the late spring/early summer does seem very likely.

For the doomer bears out there - not least those seeking an index fractal similar to 2007-09, they should be seeking AAPL to see a significant bounce....but then putting in a critical lower high.

Long term target would seem to now be somewhere in the low 300s..late 2013/early 2014.

ANR, BTU - miners having problems

With the main equity indexes showing what appears to be the start of a retracement, the coal miners saw some extra downward pressure. Both Alpha Natural Resources (ANR) and Peabody Energy (BTU) saw very significant declines of 5.5 and 6.4% respectively.


ANR, daily

BTU, daily

Summary

Lets start with ANR, which has one of the most perfect H/S formation I've seen in a very long time. You can see a clear left shoulder in mid December, then the head, with the right shoulder completing just last week. Today's break below the neckline is significant, and the next downside target is the rising support @ $8.30

A break of 8.30..and ANR could easily slip to 7.50 next week.
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Peabody's chart is nowhere near as 'clean' as ANR. There is a bigger sloping H/S formation.. but that never really decisively broke.

First downside target is 22/20, although the latter will be very difficult to hit if the main indexes only retrace down to sp'1460/50. It would appear very unlikely we'll see the July low taken out for many months, if at all this year.
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BTU remains superior to ANR on a balance sheet perspective, but both generally trade kinda closely. Coal remains a very neglected sector, those seeking much higher index levels this year should certainly be looking for the whole energy sector to start breaking significantly higher into the spring and early summer.

STX - bizarrely valued

Seagate Technology Holdings (STX) Q4 earnings were very reasonable, although the market was greatly displeased with the outlook for 2013. STX closed -9% @ $33.90. The near term trend is likely to show continued weakness, but the current valuation is arguably very low.


STX, daily

Summary

So, Mr Market decided to slam STX 9% lower. The earnings weren't great, but they certainly weren't bad either.

see Key stats, via yahoo! finance

Debt remains low..and cash just about matches debt. Profit margins are very good, although future revenues aren't set for some magical ramp anytime soon.


Price outlook

In terms of stock price, there will be very strong support in the 31/29 zone. Of course that is almost a further 9% or so lower.  On any basis, it would be very surprising if STX put in a few daily closes <29.


Possibilities ahead?

A straight forward take-over seems very viable. Would STX ever consider a merger with its primary rival Western Digital (WDC) ?

Regardless, Seagate is ticking along pretty well, and they should be fine across the longer term.

SCCO - slips lower on a downgrade

Southern Copper (SCCO) slipped 4.9% to close @ $39.38, which was the biggest daily fall in over 8 months. The fall was at least partly due to a broker/analyst downgrade, although the daily chart shows SCCO was rolling over since last Thursday anyway.


SCCO, daily

Summary

SCCO is the main rival to FCX, and I remain bullish about both across the longer term.

SCCO has good cash/debt levels, great profit margins, and a dividend that any bond holder should greatly envy.

Even if margins slip a little, it still won't do much to the underlying strong outlook.

From a buying perspective, going long later this week - or early next, in the 37/36 zone would seem a very attractive level. Baring a disastrous earnings-forecast for Q1/2 2013, it would seem very unlikely the 200 day MA @ $32 will be tested any time soon

*SCCO have earnings next Monday, and it will be one to watch.

AMZN - rallying on thin air

Amazon (AMZN) closed Friday +3.8% @ $283.99. This is a new historic high for AMZN, and it is now right up against double trend/channel resistance. A near term 'minor collapse' - if disappointing earnings, to the low $260s is very viable.


AMZN, daily

Summary

Unlike AAPL which still makes a truck load of money (PE of 8, $60 a share)..AMZN is failing to make even moderate profit, and its net margins are now a mere fraction of 1%.

On any basis the stock is still enveloped in a cloak of delusion, inspired by the clown finance media of course, but also by those who somehow think a profit margin of <1% is somehow 'acceptable'.


Crazy price-earnings ratios

The trailing PE is now in the mid 3000s for AMZN. Even the forward PE is still in the 100s, and that's assuming 'everything goes as expected' in 2013

see Key stats @ Yahoo! finance

In terms of stock price. If the market decides earnings are just 'not good enough', a swift move to the 260s is an easy target. The marginally more interesting downward move would be to the lower section of the channel..somewhere in the 240/30s.

Considering the strength in the main equity indexes, it would seem VERY unlikely AMZN will be trading under the 230s - where the 200 day MA is also lurking.

Lets be clear, just about everyone - not least, including yours truly, uses AMZN. Its a great service after all, but their pricing model stinks.

They need to quit offering free delivery, and ramp those margins up 5-7% minimum, preferably 10-12%. Where are the profit motivated management when what is a decent company, desperately needs them?
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AMZN will be one to watch this week.

*Q4 earnings are announced at the close of Tuesday, Jan'29th.

AAPL - still wrapped in hysteria

Despite posting Q4 earnings which were unquestionably 'reasonable', the market is now displeased with the outlook for AAPL this year. AAPL closed the day -$64 @ $449 - a fall of 12.5%. On any basis, this is a huge drop for such a corporate giant.


AAPL, daily

AAPL, monthly

Summary

It has to be said, relative to the main market, AAPL is under valued. The company is still wrapped in hysteria, primarily inspired by the clown finance TV cheer leaders.

The underlying balance sheet remains very good though, not least being debt free with a cash mountain over $130bn or so. 

see Key stats @ Yahoo! finance
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The company is clearly not the same without Jobs at the helm. Yet is has all the money it would need to buy just about anything. There remains a lot of chatter that AAPL might want to bid for the privately held Twitter. Or maybe buy Facebook? Would Zuckerberg sell out @ $50 a share?


A mid-term bounce..before more downside?

The monthly chart outlines a possible bearish outlook across 2013 for AAPL. The key aspect is that a major multi-month bounce is likely at some point - starting from the low $400s. It will only be AFTER the bounce, and with maybe a further 1-3 months of sideways churn, that a more decisive move to the downside (including the major market) might occur.

GRMN - slipping below the radar

Garmin (GRMN) closed significantly lower for a second day, -1.5% @ $38.30. Next soft downside zone is around 37/36. A break of the November lows seems unlikely though, and if Q4 earnings come in reasonable, a break into the upper 40s looks very viable this spring.


GRMN, daily

Summary

Garmin is a stock I've been watching for a months now. Very profitable, with margins of around 20% (something AMZN will never see!). GRMN is debt free, with a nice little cash pile of over a billion.

see key stats @ yahoo! finance

Clearly, its seeing some distinct weakness since the jump higher in late November, and where it got stuck around $43.

What is clear, relative to the main market, its arguably under-priced, especially when you consider its broader balance sheet.

When the indexes retrace - 'whenever' that might be, I'll certainly strongly consider GRMN as a long play into the late spring. First target would be that $43 spike high..and then $50.

A break over $50 would be extremely important, and if GRMN can hold the 50s for a few consecutive days, there is open air all the way to $100.

One to watch..especially if the indexes see a minor pull back.

*Next earnings are due Feb'20th

TVIX, UVXY - the never-ending pain

With the main indexes continuing to melt up, and the VIX stuck in the low 13s, the 2x (bullish) VIX instruments of TVIX and UVXY continue to decline..on their permanent long term trend to zero.


TVIX, daily

UVXY, daily

Summary

TVIX and UVXY declined for the 13th day - from 15, since the VIX peaked @ 23.23 on Friday Dec'28th (in AH trading).

An outright nightmare for those holding - even from just last Friday afternoon!

*at the current rate of decline, both will need another reverse split within a month or two.

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VIX, daily

The underlying MACD (blue bar histogram) on the VIX does look like we'll see it go positive cycle later this week, certainly by this Friday/ next Monday, but how far up ?

At best, maybe a straight forward gap fill in the 16-18 zone? Anything over 18 just seems completely unlikely until the late Spring - and thats assuming the US economy slips into a moderate recession.
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QE3 - the one that will never end, is fully underway now, with 45bn of POMO money per month..every month. That will certainly help to prop up the market.

The VIX will thus likely stay under the important 20 threshold for many months to come, and if that is the case, then anything that is long volatility, will relentlessly decay.

FCX - post death-cross depression

Despite the indexes closing higher, Freeport Mcmoran Copper & Gold (FCX) saw further weakness, closing -1.3%, @ $33.64.  With the recent death cross, FCX is seeing some distinct weakness. First soft downside target is around the $33.00 level


FCX, daily

Summary

A very clear rollover is clearly seen on the daily chart, and FCX was clearly standing out from the rest of the market today.

Underlying MACD (blue bar histogram) cycle is due to go negative cycle when the market re-opens on Tuesday morning. A move to at least $33 seems a given, the only issue is whether it can hold there, or will it make an attempt to re-test the lows from early December.

If the main market does see a retracement into the sp'1450/40s, then FCX will surely see much lower levels, and indeed...test those December lows in the 31/30 zone.

A double bottom for FCX in late January @ $31/30 ?
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FCX is unquestionably a great company, is one to watch, especially so if the market does start to retrace 3-4% lower in the remainder of January.

AMZN - overvalued by 90%

Amazon (AMZN) traded with the main market today, closing 0.6% higher @ $271. Since the mid November lows, AMZN is up over 20%..and shows very little sign it may be close to even a short term top.


AMZN, daily

Summary

Despite profit margins of 0.07%, AMZN just keeps on rising on a multi-month basis.

AMZN - much like FB and AAPL, is still clouded in hysteria, not least from the clown media, who seem completely oblivious that the company doesn't make hardly any money - despite sales/turnover, which will likely be around $50bn in 2012.

Seriously, what kind of business has sales of 50 billion, and can't even maintain a profit margin of 1%!

see key stats @ yahoo! finance

The forward PE - which assumes improving profits across 2013, is still 155, which is simply insane. The trailing PE - is embarrassing in the extreme, now in the 3000s. On any fair value basis, it doesn't deserve to be trading about the current SP PE' - which for simplicity sake we'll call 15. So, if AMZN's forward PE is 155...just divide by 10..and you get a more inline number..which would be $20/25 a share.
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But hey, its AMZN, so..profits no longer matter...right ?

AMZN remains a crazy stock, but is certainly one to watch...not least when its next earnings are posted Tue' Jan'29th.

SCCO - relentlessly higher

Southern Copper (SCCO) closed moderately lower by 0.35% @ $40.36. Yet the multi-month trend is starkly higher. If Copper prices can start to climb into the spring, then SCCO - along with most of the mining sector, will likely continue upward.


SCCO, daily

Copper, weekly, 2yr

Summary

Southern Copper is my second favourite miner (the first being FCX), but unlike FCX - which purchased two Oil/Gas servicers, SCCO is keeping it simple, and this is seen in the recent price action.

Whilst FCX dropped because of the new share issue, SCCO is relentlessly climbing.

SCCO is now valued at almost $35bn, has a moderate cash pile of 1.5bn, and only 2.7bn in debt. Profit margins are very good, and SCCO has a dividend yield (trailing) of 9%.

On any basis, its still somewhat undervalued with that level of dividend.

see Key stats @ yahoo! finance


Price action

SCCO could comfortably fall from the 40s, down to the 37/36s, and this would not do any damage to the mid-term rising trend. The rising (at an accelerated rate) 200 day MA in the 31s will offer very strong support if Mr Market is spooked by the debt ceiling this Feb/March. I don't expect any move <35 though this spring.


SCCO is of course heavily dependent on Copper prices....

Dr Copper - where next?

It would appear Copper is in yet another tiny down move, but I do expect the rising trend - seen on the weekly chart, with support around 3.50 will hold.

First upside would then be 3.85, and then 4.10. It will be fascinating this spring to see if Copper can break over $4.20 or so, that would be a pretty important move, and suggest new inflationary pressures - as opposed to the 'deflationary doom' that many are still forecasting.
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SCCO, next earnings Feb'4

FCX - death crossed

Freeport McMoran Copper and Gold (FCX) closed lower for a third consecutive day. The declines so far, are only moderate though. More importantly, FCX has now seen the 50 day MA cross under the big 200 day MA...the infamous death cross.


FCX, daily

Summary

Near term downside target - if the current up channel is broken, would be at least $33.

Baring a break in the main indexes, <sp'1425, FCX should comfortably hold above its December low in the $30s
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So, we now have short term weakness...endorsed by the death cross, but without question, FCX remains one of the best miners in the world.

FCX is one to watch, and can often be a good guide to the broader market direction.

ANR, BTU - coal sector on the slide again

Whilst the main indexes closed largely flat, the coal sector was especially weak, with leading stocks Alpha Natural Resources (ANR) and Peabody Energy (BTU) falling by 3.9 and 2.3% respectively. Near term trend offers some way lower yet to go, not least if the main indexes finally do retrace back to the sp'1440s.


ANR, daily

BTU, daily

Summary

BTU is clearly weaker than its smaller rival of ANR, and the break of the rising support from the July lows is pretty significant. The first big target is the big $20 level.

The coal sector remains one much maligned by most western governments, which is ironic, considering coal is one of the largest energy sources available.

The mining sector is usually the one least affected by finance TV 'cheer leader' hysteria, and thats just one of the reasons I respect it the most.

AAPL - due a multi-month bounce

Apple (AAPL) is still struggling, and closed Friday -0.6% @ $520. Both the monthly and weekly trends are still pressuring the stock lower, but if AAPL can break above the declining 50 day MA in the low 540s, there looks to be a real opportunity for a major multi-month bounce/rally.


AAPL, daily

AAPL, monthly

Summary

AAPL sure is taking its time to build a floor. Its been bouncing around in the $500-600 range for the past 8 weeks, and it looks like its coiling up for a major move. Considering the strength in the indexes - which look set for the low sp'1500s in February/March, my guess is that AAPL will eventually break significantly higher.

Certainly there is the possibility of a fast wash-out move into the 475/450 range, but that just seems increasingly unlikely. So long as earnings are in line with what the market is expecting, the stock will very likely see a considerable move higher, probably back into the 600/650 range.


The bigger picture

The monthly chart above is purely speculative, and not to be taken too seriously. However, I wanted to at least highlight the style of the decline in AAPL prior to the stock market collapse of 2008.

We can see a strong three month bounce from March>May, then three months of chop, before the main collapse wave. Especially note how the 20 month MA appears to have held - just as it did in March'2008.

Looking further out, perhaps AAPL will come to floor in the low 400s towards the end of this year?


Undervalued..relative to the main market

Unquestionably, AAPL has one of the strongest consumer brands in the world, and a mountain of cash. The stock itself is still surrounded by a lot of hysteria - not least reinforced by the cheer leaders on finance TV.

Current PE (forward) is a lowly 9, on any basis, AAPL is undervalued compared to a lot of the other junk out there.

see: key stats @ Yahoo! finance

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*AAPL Q4 earnings are at the close of Wed ' Jan'23.

FCX - approaching massive resistance

Freeport Mcmoran Copper and Gold (FCX) closed the day -0.8% @ $35.00. FCX is now approaching very strong reinforced resistance in the upper 35s. A move lower (however brief) seems very likely in the coming week or two.


FCX, daily

Summary

FCX remains one of my favourite companies..not least because its a miner. With its recent double acquisition of two Oil and Gas service companies, it is now very much in the 'black gold'...as well as the ordinary gold business!

There is major gap resistance from the early December snap lower, along with both the 50 and 200 day MAs.


The cross of doom for FCX ?

A death cross is very likely for FCX next week, as the 50 day MA breaks beneath the 200 day MA, somewhere around $35.50.  Even if price action is flat, the underlying statistical averages will surely cross.

Whether the algo-bots take this as an excuse to snap FCX sharply lower..is hard to say, but it sure is not a positive buy signal in the very near term!






Near term downside targets would be $34 and then $31, although if the main indexes fail to go any lower than sp'1425, I don't expect the latter to be hit.

FCX remains one of the finest companies out there, in an industry that actually producers something of real value to the world. 

AAPL - still very weak

Despite the indexes closing moderately higher, Apple (AAPL) closed 1.5% lower, to rest @ $517. The big $500 level is a mere 3% away, and if the main indexes do turn lower - even if its just to sp'1440, AAPL will be in real danger of putting in a daily close <500.


AAPL, daily

Summary

So, another close lower for AAPL, and the trend is looking pretty bad. If we do see a few daily closes <500, then it might even be a key sign that the bigger market is also in trouble.

It will be one to watch for the remainder of the week.

*AAPL has Q4 earnings at the close, Wed' Jan'23.

GE - slipping lower

General Electric (GE) has already given back half of last weeks gains. GE closed Tuesday -1.1% @ $20.89. Next target is the New Years Eve low of $20.30


GE, daily

Summary

Many of the heavy industrials are really struggling since the two day hyper-ramp. GE is already back to levels seen on New Years Eve, and if the 200 day MA @ 20.30 fails to hold, then a move to test the November lows , around 19.75 seems likely.

With huge corporate giants like GE struggling, its a probably a confirmatory sign that the broader market will similarly fall lower in the coming few days.
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It will be fascinating to see what happens to the main market if GE does break into the 19s..and keeps on going.

In fact, it would arguably be a key warning that the sp'1398 low will be in serious jeopardy.
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GE has Q4 earnings, pre-market... Friday Jan'18th

AMZN - bizarrely valued

Amazon (AMZN) was upgraded by MS to $325 today, and that was just the latest excuse to extend the ramp from the November low of $220. AMZN closed the day 3.6% higher, to close @ $268, which is a new historic high!


AMZN, daily

AMZN, weekly

Summary

Is there anyone in the developed nations that didn't order at least one item from Amazon this Christmas holiday season?

Yet, despite the HUGE customer base, a highly respected brand/service, AMZN is failing. It is simply unable to hold a decent profit margin.

see key stats @ yahoo! finance

With a trailing PE of 3195, something is seriously wrong here.

Indeed, unless AMZN can become even more efficient, it is in real danger of posting some very significant losses in the coming few years.


Fair value?

On any outlook, AMZN should be no higher than $100, and that's assuming stable moderate economic growth, with no 'ticking econ-time bombs'.

Today's upgrade of AMZN by Morgan Stanley is indeed bizarre, but then that is the modern financial services industry for you.
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Lets be clear, AMZN is not going anywhere, it could easily sustain massive losses, but for now..despite the latest rally of hysteria, the stock is grossly over-valued.

Eventually...things like price/earnings ratios do matter. Today's trailing PE of 3195..is simply insane.  Eventually...normalcy will return, just as it did for NFLX, GMCR, CMG...and so many other 'hysteria driven' stocks.

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AMZN Q4 earnings are due, at the close of Thursday Jan'31st. It will be fascinating to see how they did this Christmas.

RIG - rats jumping back onboard

Transocean (RIG) closed strongly higher for the fourth consecutive day, closing 5% higher @ $51.73. It has been a starkly strong week for RIG, having climbed over 15% since New Years Eve. The near term looks distinctly positive.


RIG, daily

Summary

RIG is seeing a very clear breakout from a trading range that spans five months. With two daily closes >49, this is pretty good.

The company has been having serious issues, not least related to the Deep Water Horizon disaster, but it seems that issue is now closed, with an agreed payment, and the company can finally move forwards.

see key stats @ yahoo! finance


Upside targets?

First upside target is the March 2012 high in the 57s. If RIG can break back into the 60s, - and if the main indexes broadly hold together into the summer, then a full retrace to the March 2011 high of $85 seems reasonable.

After all, almost anything related to the Oil sector is going to do well in the longer term.

It is certainly one to watch in the coming weeks.

AAPL - failing at the 50 day MA

Apple (AAPL) is having difficulty breaking above the declining 50 day MA. AAPL closed the day -1.2% @ $542. Today's red candle confirms the black (fail) candle from Wednesday. First downside target is around $530/25


AAPL, daily

Summary

Many have recognised the 50 day MA as an important level for AAPL to close above. Despite the market soaring almost 5% in just 3 trading days, AAPL is still stuck in the 540s.

Today's close is certainly  nothing dramatic, but it does confirm yesterdays little sign of weakness (as black candles often are).

*If the indexes retrace back to sp'1440/35, then AAPL looks set to hit 530 or so.

Considering the weekly/monthly charts...I'd guess we battle back higher from there.

TVIX, UVXY - nuked..again

With the indexes seeing what is arguably a hyper-ramp, the VIX got smashed another 18% lower into the 14s. Not surprisingly, both the 2x bullish VIX instruments - TVIX and UVXY suffered a second devastating daily close, falling around 21 and 23% respectively.


TVIX, daily

UVXY, daily

Summary

The leveraged instruments..when they go badly, are unquestionably the worse horror show of all.

We've now seen the 2x bullish VIX instruments lose about 45% of their value in just two trading days.

Not much can be said, other than a floor will be reached...'at some level'.

The real problem though is even if the VIX went back to the level it was at the Friday close, due to the statistical decay, TVIX/UVXY would still be down around 10/15% !
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As for the VIX itself...

VIX, weekly

 
This is one of the most powerful down candles we've seen in a very long time, perhaps since market floored in October 2011.

Those who believe this two day index rally is not going to last, should be seeking a VIX levelling out in the 13s..sometime in the middle of next week.