CAT - still a very large bear flag

Caterpillar (CAT) remains within a giant bear flag, and price action is still very weak. This is despite the main indexes a mere 1% from the mid September spike high of sp'1474.


CAT, daily

Summary

With the transports closing badly in September, and the underlying econ-data increasingly warning of a US recession in late 2012/early 2013, CAT is clearly one stock that is actually reflecting reality.

First downside target is a break of the flag, by end October, bears should seek somewhere in the 84s, although it will be a lot more decisive with a break of the July low <$80.

Only with a clear break over 97.50 - and preferably the big $100, could bulls justifiably get bullish on this engineering monster.

CAT remains a good company, but near term, the outlook remains very suspect.

HPQ - crashes

Hewlett-Packard (HPQ) crashed almost 13% lower today to close @ $14.92. The market does not like the CEO, and it most definitely does not like outlook for either the short, mid, or long term. HPQ remains lacking direction, in a technological corporate world that is filled with piranha.


HPQ, daily

Summary

We now have one of the secondary targets being hit.. $15. With the close <15, I certainly believe $10 is going to also be hit, probably within the next 2 months. If the main indexes can manage to rally into Christmas though - with SP'1550, then I'd delay that $10 target until late Spring 2013.


So...what now for HPQ?

I certainly would never suggest the company is in danger of going under. No, that won't happen, but as I've noted a few times over the past few months, it is entirely lacking in leadership (the CEO is entirely incompetent, and the market KNOWS it!).

Given a few years, and a decent young CEO who understands how to operate a smartphone and how to program a toaster, I'd guess HPQ will be a great long term recovery stock.

..that time is certainly not yet though!

First, lets see HPQ cycle lower to hit the big $10.

*there was one analyst on clown network'1 today, touting HPQ @ $7. I could envision that, but that certainly seems like something to see in the latter half of 2013.

AAPL - a bounce off the 50 day

Apple (AAPL) battled back to close a touch higher late today. After declines of around $8 earlier, AAPL still managed to close above the important 50day MA of $549


AAPL, daily

Summary

It remains a bit of a messy picture in the near term. The long term trend is still clearly upward. Until we break the lower channel/trend - currently $620, AAPL is still comfortably cruising higher.

If earnings for Q3 come in at least reasonable, a re-challenge of $700 is very likely, and that would be suggestive that the broader market has another good chance of hitting sp'1500 in the next month or two.