Wednesday, April 18, 2012

How Far Will Apple Fall?

Apple (NASDAQ:AAPL) – This is a household name, and when the stock falls it makes worldwide headlines. AAPL had broken from a sideways trend in late January at around $427 to $430, and ran to a high of almost $644 early this month. It was a huge move for this triple-digit-priced stock, but many said that the earnings justified a price of $1,000 or more.

Credit Suisse has a target of $750 and S&P is at $800. But after five successive days of profit- taking, those numbers look to be a long way off. In truth, the stock has moved too far and too fast even for a stock that S&P expects for a 40% growth rate in FY 2011 and 45% in FY 2012.

Simple profit-taking appears to be the reason for the stock’s recent decline. The question then for both traders and long-term investors is, “Where should I expect to be able to buy Apple?”

Its chart gives a hint as to how low it might go, but this is a volatile performer and buyers would be wise to put in open (GTC) orders if they plan to purchase it. The Fibonacci numbers calculated from the breakout in January show that a 33.3% retracement would occur at $570 and a 50% retracement is at $535.

In between is the 50-day moving average at $559 — a price that traders will no doubt hop on just to grab a few points from a bounce. Long-term investors should plan to scale into the stock starting with a third at $570, then a third at $560, and a third at $535.

Trade of the Day – Apple (NASDAQ:AAPL)
Click to Enlarge

Housing: New Bubble or More Trouble?

The in-laws own a gas station in Miami that they’ve wanted to sell for years. But they dithered when the market was hot and ended up being stuck with it when interest evaporated in 2009.

Lately, though, the phone has begun to ring again. It’s not exactly a feeding frenzy but real offers are coming from legitimate buyers for the first time in three years.

That’s actually a pretty good description of real estate in general, where low interest rates have convinced a growing number of people that it’s time to buy. See this upbeat story on the home builders:

Pulte, Lennar jump as survey shows housing rebound
NEW YORK (MarketWatch) — Shares of U.S. homebuilders rallied on Wednesday after a Wells Fargo analyst’s research report said data from 20 select markets nationwide are showing strength across the board.

“For the third consecutive month, our survey points to an improvement in orders suggesting 2012 may be the long-awaited recovery year for housing,” the note said.

PulteGroup PHM -1.39% added more than 8%, Lennar Corp. LEN -1.47% gained 5%, D.R. Horton DHI -2.44% rose 4.2% and Toll Bros. TOL -0.86% gained 3.8%.

The bellwether industry ETF, the iShares Dow Jones U.S. Home Construction Index Fund ITB rose 3.4%. (more)

John Williams – Real Earnings Collapse, Nearly 50% Below 1973

from KingWorldNews:

John Williams, of Shadowstats, has warned that real earnings continue to literally collapse. Also note that the above graph illustrates consumer sentiment still remains below the 2003 market crash levels. Williams’ graphs are excellent depictions of what a collapsed economy truly looks like. They also show why the middle class in the Western world continues to be destroyed. Williams also shocked KWN with his graph showing real earnings tumbling, now nearly 50% below 1973. Here is what Williams had to say: “The latest consumer earnings and credit numbers show ongoing structural deterioration in consumer liquidity. With lack of positive, real (inflation-adjusted) growth in income, there can be no sustainable growth in real personal consumption (71% of GDP).”

John Williams continues @

Jay Taylor: Turning Hard Times Into Good Times

4/17/2012: Can Nature Punish the Bad Guys?

Doctor Copper Becomes Doctor Plopper

From Graceland Updates / By Stewart Thomson / Tuesday, 17 April 2012

1. What economic phenomenon is most worrisome to Dr. Ben Bernanke? To view a picture of the answer, please click here now.

2. A higher oil price is Dr. Bernanke’s biggest fear, and I believe a new move higher is beginning right now.

3. David “SuperDave” Greenlaw is Morgan Stanley’s chief U.S. fixed income strategist. A number of Morgan Stanley’s top economists, including SuperDave, have issued substantial warnings that the American economy faces what they term a “fiscal cliff” in 2013.

4. There is talk of dividend tax hikes, the end of the Bush tax cut extensions, and it’s conceivable that both individuals and American corporations could enter the year 2013 with no idea what their tax rates will be for the year.

5. How much fiscal tightening are you facing in 2013? Well, Dave argues that the total amount of fiscal tightening will not be the “3.5% of GDP” number bandied about by many respected economists and by the congressional budget office.

6. He feels the American economy is facing a 5% hammer that will send America back into recession in 2013.


Commodities Expert: Oil scarcity not speculation driving up prices

Jim Sinclair Warns Investors To “Instruct Their Broker Dealers To Not Register Stock Certificates in Street Name.”

by Tekoa Da Silva, Bull Market Thinking:

In what may be recognized as a prophetic call within a few years time, legendary gold investor Jim Sinclair (also known as Mr. Gold), issued a dispatch this month entitled “Street Name Review” to readers of his highly followed, urging investors to hold stock certificates in an ownership form other than “street name registration”.

Says Mr. Gold, “Investors should avoid margin accounts and instruct their broker dealer to not register stock certificates in street name…99.9% of brokerage account investors have no idea what is being done to them when their stock certificates are registered in ‘Street Name. It allows their broker to lend their shares to short sellers, driving down the price of your investment.”

Read More @

Chart of the Day - Essex Property Trust (ESS)

The "Chart of the Day" is Essex Property Trust (ESS), which showed up on Monday's Barchart "All-Time High" list. Essex on Monday rallied to a new all-time high of $154.62 and closed up 1.92%. TrendSpotter has been Long since March 13 at $148.74. In recent news on the stock, Essex on Feb 23 raised its quarterly dividend by 5.8% to $1.10. Stifel Nicolaus on March 14 downgraded Essex to Hold from Buy based on valuation. Essex Property Trust, with a market cap of $5 billion, is a real estate investment trust specializing in multifamily residential and retail properties.


Rick Ackerman Thinks the Dollar is Heading to 90