Category: Blog
Why Me Might Correct in September 8.23.2012
Although it appears that we are in a strong bullish trend, I feel that sentiment is on the edge. The S&P needs the smallest excuse to tilt in the bearish direction, and it could tear lower. I would not place a bullish bet on this index.
David Cornes holds a degree in economics from the University of Montana.
HPQ Trade of the Day 8.22.2012
Apple Update 8.23.2012
Apple was quick to rebound, however, as investors took note of
the promising pipeline expected for the holiday season. It’s all but guaranteed Apple will be releasing
the widely-anticipated IPhone 5, an event many are calling “the most-widely anticipated product launch
in history.” The company is also expected to announce the launch of an Ipad Mini, a cheaper version ofits current tablet that will take away market share from competitors, most notably Google’s Nexus and Amazon’s Kindle.
Google’s tablets had nearly 30% percent market share in 2011. While that number still lagged far behind
Apple’s dominant 68% market share, there’s no doubt Apple’s not content. Apple has been steadily
distancing itself from its main competitor Google for a while now. Apple developed its own maps
application, and recently announced it will be removing the Youtube app from its future generation
phones. Apple’s Siri was another subtle move to undermine Google. Users can ask Siri questions and get
direct responses, rather than opening their browser and going to search Google for the answer. Google’s
primary source of revenue comes from search advertising, and if Apple can increase Siri’s reliability, it
could greatly affect Google’s mobile traffic. It’ll be interesting to see if Apple can improve Siri, and also if
its maps will be at least as good as their rival’s.
Another promising note for Apple is that the Iphone 5 and IPad mini are just two of the potential
catalysts for Apple’s stock in the near future. Apple’s current IPad had sales in the 3 rd quarter of 2012
that were up 84% year over year. And that’s not even considering that before July 20 th, the company
hadn’t been selling the IPad in China, an enormous market for Apple that it’s been steadily working into.
News has also recently come out that Apple is once again in negotiations with cable companies, and that
it hopes to develop a set-top box that would carry live television and other content. In his biography,
Steve Jobs’ vision for television became apparent: embarrass hardware makers, stiff content providers,
and destroy cable companies. If any company is capable of this feat, it’s Apple, and this could be the first
step in that direction.
In addition to the aforementioned points, Apple has another thing going for it that isn’t mentioned as
often. Point blank, Apple offers the best customer service available. I’ve personally gone through six
IPhones (we’ll not get into too many details, but usually alcohol was involved). Each time I’ve gone into
Apple for a replacement, they’ve gone above and beyond to help me out. Four of the six times they
actually replaced my IPhone for FREE. It really was unbelievable. With that type of experience, will
I ever purchase a competitor’s product? When it was time to purchase a laptop for school, I bought
a Macbook. And when I purchased a tablet, I only considered the IPad. They lost a small amount of
money when they replaced my IPhones, but the money they’ll make off me as a lifelong customer
greatly exceeds the money they lost. Even Steve Jobs would sometimes personally handle dissatisfied
customers, and offer them upgrades or free products. He realized that pleasing the customer is
everything, and Apple under Tim Cook hasn’t changed this philosophy at all.
Because of all these points, I believe Apple is poised to continue higher. There will be bumps in the road;
there always are. But as everyone looks for the next company that can offer significant returns the next
few years, and as Apple approaches the trillion dollar mark, I ask you: Why couldn’t the next Apple… Be
Apple?
Brandon Kieltyka is currently an undergraduate studying Finance at Daytona State College.
Twitter: @kieltyka05
Morning Rage 8.23.2012
The Hang Seng reversed yesterday’s finish, as a top Asian performer today, gaining 1.2%, from being the
worst performer yesterday. The Chinese Banks did its largest weekly funds injection into the financial
system in 7 months, as a substitute for cutting the reserve ratio. China Telecom jumped 6.7% due to
earnings being in line with expectations; JPMorgan also upgraded the stock to overweight from neutral.
China Unicom, a slightly larger rival of Telecom, was up 4% today. Li Ning lost 3.8% after posting weak
first half earnings. PetroChina rose 0.8% today, ahead of its earnings announcement.
Early gains in Europe boosted by the US Fed soured in the early afternoon due to fresh weak data.
Around Europe the DAX and the CAC are both up 0.2% and the Madrid general is 0.4% in the opposite
direction.
Sony announced it is planning on cutting 15% of its workforce and move its headquarters to Tokyo from
Lund, Sweden.
Chinese purchases of US companies and assets hit a record high of 7.8B USD in the first 8 months of the
year. The biggest deal of the year was that of Dalian Wanda’s 2.6B purchase of AMC entertainment.
Metals are set to soar today with Gold up 1.7% and silver up 2.36% In energy crude is also up while
natural gas bucks the trend down a half of a percent.
Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market.
Comments can be directed to ryghcw19@uww.edu
S&P Emini & Unusual Options Activity Daily Vid Recap 8.22.2012
S&P Emini Pivot Points for 8.23.2012
Euro (6E) and Oil (CL) Pivot Points for 8.23.2012
First Business Interview 8.22.2012
Weekly VIX Outlook 8.22.2012
As far as a VIX play goes, I would bet a bullish spread as I believe the front months with explode to the upside once we get out of the Doldrums. As you can see from the charts below, the VIX is due for some rebuttal after the term structure collapse.
Term Structure for 8.22.2012
Term Structure for 8.15.2012
David Cornes holds a degree in economics from the University of Montana.