Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Monday, the 14th of January.
The so-called surprise that Apple is not selling as many iPhone 5's as it first expected, is no surprise to MarketClub members. Our first clue that Apple wasn't shiny and selling as many iPhones as everyone first thought came in October, over three months ago!! Our weekly Trade Triangle flashed an exit signal for Apple on 10/02/12 at $656.00. A major sell or short signal was given for Apple exactly one month later on 11/02/12 at $587.70.
Presently our Trade Triangle technology indicates that a short position in Apple stock is in order.
Remember the Amazon/Walmart trade we talked about last week? That trade is a spread trade to be long Amazon, while at the same time shorting a similar dollar amount of Walmart stock. What you are looking for in this trade is for the relationship between the two stocks to broaden, percentage wise, in favor of the long position. That could mean that Amazon keeps going up or it could mean that Walmart continues to erode, either way you'll make money if the stocks continue to diverge. This trade, or "hedge" trade as I like to call it, picked up 4% last week. This was far more than the general market did in any of the sectors. We still see this trade working as more and more of the middle class will be shopping online and not in brick and mortar stores, except for their food supplies.
We also like the way that the crude oil market is setting up, so be psychologically prepared to trade this market in the weeks ahead.
I will be traveling tomorrow on business to New York, where I will be appearing on CNBC Television on Tuesday and Bloomberg television on Wednesday. I'll be back in the saddle on Thursday for the Daily Updates, and until then Jeremy Lutz will be filling in.
Have a great trading day,
President INO.com and co-founder of MarketClub.com.