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Weak

No more Twinkies and why Apple is the perfect example of …

Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Friday, the 16th of November.

NO MORE TWINKIES!

Today we lost a little bit of American history.

Hostess Brands, Inc., founded as Interstate Bakeries Corporation (IBC) in 1930, was the largest wholesale baker and distributor of bakery products in the United States and is the owner of Twinkies and a host of other well known American brands.

After threatening on November 14th to liquidate unless bakers striking in protest against a new contract imposed in bankruptcy court returned to work, management announced today they have ceased operations at all plants. All 18,500 employees are being laid off … so long Twinkies.

APPLE IS THE PERFECT EXAMPLE OF …

Yesterday we wrote about how the news comes out after a move. Apple is a perfect example of this. In late September, Apple was trading over $700 a share and was the most valuable company on earth. Less than two months later, the stock was barely over $500.

So what happened, you might ask? What changed? What changed was the perception and sentiment of the market, and that is where our Trade Triangles truly shine.

On October 2nd, our red weekly Trade Triangle at $656 signaled an exit to all positions in Apple. Exactly one month later on November 2nd, we received a major trend change for Apple. This signal took place at $587.70 and was the first time we had seen a red monthly Trade Triangle since July 7th, 2011. Major trend changes do not occur that often for big liquid markets, and when they do you have to pay attention to them. These alerts really show you what's going on with a market and precede bad or good news that may come out much later.

Since Apple's fall from grace, we are seeing all kinds news stories come out about changes in upper management at Apple and about competition from other smartphones and tablets.

The Trade Triangles signaled an exit long before the news came out that there was trouble on the horizon for this stock. Apple just proves my point that we should listen to the market and not the news.

STOCKS TO BUY TODAY:
PENN NATIONAL GAMING (PENN)

STOCKS TO EXIT TODAY:
QEP RESOURCES (QEP)
PETROLEO BRASILEIRO SA (PBR)
BIOMED REALTY TRUST (BMR)

Now, let's go to the markets and see what our Trade Triangles are indicating.

Have a great trading day,
Adam Hewison
Founder & President INO.com and co-founder of MarketClub.com.

Click Here to view today's video

Comments

  1. rodney says:

    I can tell you to buy a stock after I see it go up 29%. Anyone can.

  2. Steve Starr says:

    I am going to put 30 cases of Twinkies in the freezer and then sell them on Ebay in ten years from now, for $500 per Twinkie.

    Of course, in 10 years, a cheesburger will cost $500.

  3. steve says:

    Good bye Twinkies? Good riddance. The epitome of junk food. Or does that title go to Cheetos? Or Velveeta? Or Spam?

  4. MarkTwain says:

    Regarding your statement "Apple just proves my point that we should listen to the market and not the news." Makes for a good quote, but linking "listen to the market" to "news" in your example may require more of an explanation.

    If you mean "the market" is acting because: (1) traders just "felt" Apple share price was too high; or (2) technicians saw something in charts there was no actual "news" involved in their actions. And we all know "the market" does not act because it has inside or advance "news" ahead of published information.
    So it would seem a market move ahead of news has nothing to do with news that finally starts coming out--it was just one of those coincidences that happens in the market.

  5. Morgan says:

    In the stocks to buy section I noticed PENN, and when I went to look at the price it was $37/share yesterday, and $48.61 right now. I wish someone could tell me to buy before it goes up 29%. Thanks

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