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Morning Rage 10.8.2012

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UnitedHealth Group (UNH | 57.13) announced the purchase of 90% Brazil’s largest health care company Amil for $4.3 billion in cash. The company modified its earnings for Q3 2013 by almost $0.20, saying the purchase will improve profits immediately.

Apple (AAPL | $652.59) continues to lose value since the release of the iPhone 5. The list of complaints about its operating system continues to grow including a purple glare when taking photos. The stock is down another $4.09 in pre-market trading after losing about $15 on Friday. Apple will report its earnings on October 25th.

Alex Kalish has a masters in economics from Suffolk U.

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Apple is Not Perfect: Maps App Disappoints 10.2.2012

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In actuality, only 0.55 percent of all iPhone 4 users complained to the company about the issue, and the number of phones returned to Apple was only 1.7 percent; 4.3 percentage points less than the number of iPhone 3GS models that were returned in the first month of that phone’s launch.

So in case you missed it, AAPL basically started to use their own data for the new map app in the iOS update, as opposed to GOOG data, and some 3D satellite images and directions were botched…and that’s it. Many strategic speculations can be pulled from this news, but basically it is an example of AAPL’s push for dominance in the app space they pioneered. Apple obviously wants to own the app tiles on your iPhone screen and the map function was ripe for the taking. The app market is a pretty organic, considering the low barriers to entry. Anyone who wants to make an app can readily develop one and have the marketplace decide if it is good. Should an entrepreneur be discontent, he or she is not held back by AAPL. If we have learned anything from Steve Jobs it is not to accept the status quo and keep pushing, for new frontiers await.

In order to remain unbiased, it is important to look at what the market said during this period. For us, it always boils down to the trade. AAPL longs hope this will blow over quickly before the media cycle really takes a hold on the story and puts a new ‘headline risk’ into the stock. Shares are off some 6% from the all time high, but with the rumored iPad mini coming out in a while, that high could soon be violated. Google longs could probably care less, for every day GOOG seems to push against a new high; and at last check GOOG was $3.00 away from said high.

In related news, AAPL analyst Shawn Wu at Sterne Agee said that iPhone yields are going to move positively with volume. The firm went on to reiterate the strong product cycle and a buy rating on AAPL shares with a $840 price objective despite map app concerns.

E-mail the author with any comments, questions, or any inquiry

mark@keeneonthemarket.com

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Morning Rage 9.26.2012

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Dow futures are down twenty-two, S&P futures down three and a quarter, and Nasdaq futures are down nine and a quarter. Crude, metal and grain futures are all down as well. Crude futures are down a buck-seventeen, gold is down five and a half and silver is down twenty-two cents.

Yesterday was a bearish day in most sectors with most major tech and financial stocks down for the day. Google (GOOG) started the day off well, moved up to a new high, but lost all of its gains for the day and ended slightly lower. Apple (AAPL) continues to lose ground from its strong couple of weeks in early September as negative news continues to come out against the iPhone. I guess five million units sold is negative news for the iPhone 5. Delays for new units may be a problem as the riots at Foxxcon, where the iPhone and iPad are made, are investigated further.

I saw a couple of inside buys in oil companies last night in my own research which is leading me to considering a bullish trade in oil or at least keeping an eye on the price to see if it jumps upward at all in the near future.

New home sales report comes out today at 10:00am EST. Analysts expect a positive growth of 10,000 newly constructed homes with a committed sale, a gain of about 2.5%.

Alex Kalish has a master’s in economics from Suffolk U.

Look for the associate option pick of the day competition on the blog.

Email me if you would like a free trial into the KOTM Trading Room: alexk@keeneonthemarket.com

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Morning Rage 9.25.2012

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The tech industry was hit hard yesterday as most of the major players ended down except for Google ($GOOG). Google reach a new all -ime high yesterday of 750.04 and traded in a $20 range. Google ended yesterday up about $15 and continued to surge up another $3.25 after hours making another new all-time high of 752.63.  Other tech stocks didn’t perform as well, Microsoft ($MSFT), Apple ($AAPL), Intel ($INTC), and HP ($HPQ) were all down more than one percent. Apple fans may have to wait for iPhone 5 resupplies around the world because the new front glass component production cannot keep up with demand for the phone.

On the topic of tech stocks, Red Hat ($RHT) released its Q2 earnings, which missed analysts projections causing the stock to tumble an extra $1.74, or 3%, on top of its $0.10 drop yesterday. Red Hat’s earnings projections were lower than Q1 but were still missed by a penny. The fine print reads that the penny lost was due to one-time closing costs.

Two housing reports will be released today, the S&P Case-Shiller HPI and the FHFA House Price Index. The Case-Shiller report tracks housing price changes throughout 20 major US cities and the FHFA report uses data from mortgages to track pricing. With housing news consistently positive in the past few weeks, I would expect more of the same today.

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Market Recap 9.21.2012

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Apple will close at around $700.00.  The iPhone 5 will be released today after much anticipation. The phone will feature a larger screen, a faster processor, and will also be the thinnest and lightest iPhone Apple has ever produced. The phone will also run Apple’s new iOS 6 which includes Apple’s new maps app. Early reviews of the app have found some glaring errors and inaccuracies.  Despite less than perfected additions to the new iOS 6 it appears that this will be the most successful iPhone of all time. Customers have been lined up outside of Apple’s 5th Avenue store since as early as last Friday.

Google closed up on the day rallying $5.90 (+0.81%) ending at $733.99. The stock hit a new 52 week high today and is now within shouting distance of its all time high.

Numbers and Earnings Next Week:
Monday- Chicago Fed national activity index, Lennar Earnings
Tuesday- S&P Home price index, consumer confidence, FHFA home price index
Wednesday- New home sales, oil inventories.
Thursday- GDP, jobless claims, pending home sales, Earnings from Financial, Nike, Accenture, RIM, Micron.
Friday- Chicago PMI, consumer sentiment. Earnings from Walgreens

James Ramelli B.S. in Finance from UIUC. Email: james@keeneonthemarket.com Follow: @Jim_KOTM

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Morning Rage 9.21.2012

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Dow futures are up 42.00 points to 13,557, S&P futures are up 3.50 point to 1,457.25 and the Nasdaq futures are up 7.25 to 2,860.50. Metals futures and crude are all up. Gold is up 5.30 points to 1775.50, silver slightly up four cents, and Platinum up almost ten points to 1633.60.

The Apple iPhone 5 will be released around the world today. The iPhone 5 made record sales in Asia, and some are worried that Apple will not be able to meet demand. Some Japanese carriers have already run out of phones. Best Buy has announced that the iPhone 4 will be free with a 2-year activation. The phones maps application is lacking and iPhone 4 and 4S users are upset about the update that took Googlemaps away.

Apple, Inc. (AAPL) was down $3.40 yesterday at the close but surged overnight with news of the phone selling out everywhere, up $4.95 and moving quickly in premarket trading.

With no real economic news tomorrow and options expiring today, the bulls should continue to own the day.

Alex Kalish has a master’s degree in economics from Suffolk U.

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Market Recap 9.18.2012

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The iphone 5 is expected to ship on Friday and analysts predict that as many as 10 million units will be sold before the end of the fiscal year. Analysts also predict that the iPhone 5 may sell as many as 250 million units in its lifetime.  This could make the iPhone one of the most successful products Apple has ever launched.

Rumors of a potential release from the Strategic Petroleum Reserve continued to circulate pushing oil prices lower today. Brent traded higher for seven sessions in a row before falling yesterday and today.

Things to look for this week:

Wednesday- Weekly mortgage apps, housing starts, existing Home Sales, AutoZone, General
Mills, Adobe Systems, Bed Bath & Beyond

Thursday- Jobless Claims, Earnings from CarMax, ConAgra, Rite Aid and Oracle.

Friday- iPhone 5 Ships.

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Morning Rage 9.18.2012

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Metals futures continue to slide lower from Friday as well. Gold futures are down 10.80 overnight and platinum futures continue their reversal, down 12.60 points. Crude futures stayed relatively still, only losing about 0.38 after getting crushed yesterday, down about three points.

Apple (AAPL|  $699.78) continues to be the diamond in the rough as buyers pushed its price over the $700 mark in after hours trading to $701.60. This comes after another big gain of $8.50 even as the rest of the market slid downward. The sentiment in the market seems to be that iPhone 5 record sales have proved to investors that AAPL has not lost it’s obsessive fans and may not for some time.

My earnings plays for today is FedEx (FDX| $87.53). FeDex reported a rate increase for 2013 amidst an earnings report down once cent from last year for this first quarter. Revenue and operating income grew 3.0% and 1.0% respectively from last year but net income was down 1.0% from last year for this quarter. FedEx has dropped its forecast for annual earnings to $6.20 to $6.60 from $6.90 to $7.40. The stock fell in after hours trading almost 2%. The Sep ATM straddle suggests the stock will move around $2.50 by Friday and a little more than $4.00 by Oct expiration. I am going to wait to see what direction it moves in today and possibly play a spread in that direction for October.

Later today, a housing market index report will be released around 10:00 am EST. Last month, the index rose 2 points reflecting sales of new homes, expected sales in the next six months, and prospective buyers. Expected sales may jump higher because of QE3, so the information may be distorted higher.

Alex Kalish has a master’s degree in economics from Suffolk U.

Questions, comments and suggestions welcome: alexk@keeneonthemarket.com