Author: The INO.com Team

What's ahead for Apple (New Video)

Posted on by The INO.com Team

I was looking over several charts this past weekend and I was shocked to recognize a chart formation playing out before my very eyes. I've seen this same formation a million times before, but I just didn't want to believe it could be happening to my favorite stock, Apple (NASDAQ_AAPL). Some would call this denial.

In the past I've written extensively about Apple products on this blog. If you have read any of these postings, you'd know how crazy I am about their products.

Several months ago I discovered a major technical formation that spelled trouble for Apple. I have to admit that I was saddened by this. This formation was also picked up by our "Trade Triangle" technology. Our algorithm triggered a sell signal and has continued to suggest a short position for Apple all this time.

Watch my new video on Apple.

I was surprised that we've seen this market come down so easily. It seems like every time I visit an Apple store they are always busy and their products always seem to be selling well.

The question is, are we at the end of the iPod era?

Given the chart formation, the double top and pivot point, it seems we are headed lower. The Pivot Point measures down to the $40-$50 range and Apple at $90 still has a long way to go on the downside.

What caught my eye this weekend was a weekly continuation pattern to the downside and the fact that Apple closed at a new weekly low for the year. This is not a bullish sign by any stretch of the imagination.

For this coming week, I expect to see further downside pressure on Apple. I believe that we are going to be looking at the $50-60 dollar range as our target zone. Of course everything within will be tempered by our "Trade Triangle" technology. When our short-term "Trade Triangle" turns positive, we will close out short positions and take to the sidelines. In my opinion, it's going to take some time for this market to improve and turn around. The technicals are just too weak at the moment.

Every success in trading,

Adam Hewison
President, INO.com
Co-creator, MarketClub

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Posted on by The INO.com Team

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Adam Hewison
Co-Creator, INO TV

This is what I think will happen to the dollar, stocks and crude oil in the next two months.

Posted on by The INO.com Team

A plan to save the world -- part two, or is it three?

When Paulson came out today and stated that his earlier plan to save the western world was not working, he offered up a plan "C" (or is it "D")  to relieve pressure on consumer credit, scrapping his earlier effort to buy the value mortgage assets.

No matter what happens or what the next plan is here, are the 3 reasons I believe stocks are headed lower.

* Number one: The trend in most all stocks is down. This trend is likely to persist and last longer than most people imagine.

* Number two: There is no plan. The government is floundering and does not have a plan that is going to work anytime soon.

* Number three:  We have a lame-duck president, and nothing is going to happen of any consequence until President-elect Obama is sworn in.

Okay, so let's look at the first problem. Most people trading the market today have had no experience in a prolonged bear market like the one we had in the '70s. That bear market was brutal as it did not let anyone out. Over the course of the early '70s, the bear market basically wore people out to the extent they eventually just threw in the towel. We believe the market is going to make another new low and take out the recent lows that were put in place in early October. Unlike a bull market that constantly needs positive news to drive it higher, a bear market just falls under its own weight.

NEW VIDEO: This is what I think will happen to the dollar, stocks and crude oil in the next two months.

The second problem we have is that there is no concrete plan in place to rescue the economy. In fact, the domestic and global economic issues are so great that they are overwhelming in scope. The Paulson plan, which is being changed and will continue to change, is a major concern and creates significant uncertainty in the marketplace. Only when we see the new regime take office this coming January will we see any meaningful changes.

The third problem we have is a lame-duck president. This is a major problem for the markets as President-elect Obama can not make any sweeping changes until he is sworn into office. Yes, he may hit the ground running, but the reality is, it's not for over two months from now and a lot can happen to the market in two months. The key levels that everyone is going to be watching for are the recent lows we saw in early October. If these lows are taken out, and I expect they will be, it's going to push this market and everything else down to new lows. It will exacerbate the housing situation, the unemployment situation and most of all, the morale of the country.

Having lived through the bear market of the '70s, I know firsthand how difficult the journey we face is going to be. Now this may seem like a very pessimistic outlook and in some ways it is, however there are always opportunities to make money in the marketplace. These opportunities may not be in stocks, it may be in forex or the commodity markets. Our goal on this blog and with the markets is to point you in the direction of where we believe those opportunities are.

So buckle your seatbelt. I think we are in for a bumpy ride.

Adam Hewison,
President, INO.com
Co-Creator, MarketClub

Short Intel on 9/02 at $22.65 find out more

Posted on by The INO.com Team

MarketClub's Trade Triangle technology short INTEL from $22.65 on 9/02

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INTEL news from our media partner Associated Press

By JORDAN ROBERTSON
AP Technology Writer

(AP:SAN FRANCISCO) Intel Corp.'s deep cuts to its fourth-quarter guidance offers further evidence that technology companies are in for a beating because of the economy.

The Santa Clara-based company slashed more than $1 billion from its sales forecast and dialed its profit expectations way back. Intel, the world's biggest maker of PC microprocessors with 80 percent of the global market, blamed a clampdown on spending for reducing demand for its chips.

The announcement Wednesday after the market closed illuminates how the economic crisis is rippling across industries. As consumers and businesses cut back on buying all kinds of things, their reduced purchases of PCs are harming computer makers and their suppliers.

Wall Street got an early glimpse of the severity of damage to the technology sector last week.

Cisco Systems Inc., the world's largest maker of computer networking gear, reported that orders fell off abruptly in October. The grim forecast suggested that other tech companies will have to absorb major damage to their sales as well. Cisco was the first major technology company to report results that included October.

More specific warning signs for the PC sector emerged last week when Lenovo Group Ltd., the world's fourth-largest PC maker, reported that profits plunged 78 percent.

Intel doesn't report its fourth-quarter results until January. Its early acknowledgment is a sign that business conditions are so bad the company needed to make major revisions to its financial models.

Intel now expects sales of $9 billion in the last three months of the year, plus or minus $300 million. It previously expected sales between $10.1 billion and $10.9 billion, and analysts polled by Thomson Reuters were looking for $10.3 billion.

Intel blamed "significantly weaker than expected demand in all geographies and market segments" and PC makers buying fewer new chips as they burn through existing inventory to save money.

Intel's profit is being hurt badly. The company's closely watched gross profit margin will now come in around 55 percent of revenue, plus or minus a couple of percentage points. The previous guidance was for roughly 59 percent.

Gross margin measures profit on each dollar of revenue once manufacturing costs are stripped out. It's an especially important measurement for chip makers because upgrading and maintaining their factories is hugely expensive.

Intel shares fell 97 cents, or 7.2 percent, to $12.55 in extended trading after the warning was announced. The stock had fallen 41 cents, or 2.9 percent, to $13.52 during the regular trading session.

The shares have lost about half their value since a 52-week high of $27.99, reached last Dec. 6.

Intel had been performing well before the downturn struck. A new manufacturing process that shrinks the size of its chips' circuitry has allowed it to wring healthy profits despite pressure on prices for those chips. One of those pressures has been the rise of so-called "netbooks," which are pint-sized PCs that are cheaper than regular laptops and are used primarily for surfing the Internet.

Intel's $2.01 billion in profit for the third quarter beat Wall Street's expectations. At the time of the earnings release, the company was optimistic about what lay ahead, if fuzzy on details. Intel warned that it would be tough to predict fourth-quarter results but predicted steady profits.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Is now the time for a bear market rally?

Posted on by The INO.com Team

I've been in contact and reading the blog Psychologyofthecall.com for a few months now and from what I've read they seem to be on top of a number of issues. I asked them to answer one question for me...Is now the time for a bear market rally? Here's their answer:

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The ongoing global financial crisis has made perma bears look like geniuses, yet the Psychology of the Call team (POTC) senses the imminent appearance of a bear market rally for four good reasons.

1) President elect Obama's first speech and chief of staff pick, Mr. Rom Emanuel, were very bearish for the market; we are confident both of those negativities will change soon. POTC believes Mr. Obama's goal in the coming days and weeks will be to do everything popular to be re-elected to a second term in just four short years. He understands that half of U.S. citizens are in some way affected by the mayhem of the recent sell off; Americans expect transparent leadership and policies now.

It's that second pivotal term where Presidents are more inclined to show their true colors, especially in terms of openly hell bent left or right policy. We remain confident and are prepared for a lag effect Thanksgiving Obama rally to begin this week, as his centrist appointments and policies begin leaking through hedge fund insiders. We are not waiting for New Year to enter long positions, as that seems to be the easiest and most ‘herdish’ trade today: we remain forward thinking contrarians and are going long the S&P emini contracts into Thursday's death spike.

We believe President elect Obama will appoint some Wall Street friendly names to his first administration, doing so to satisfy his political appetite to win that critical no holds barred second term in 2012.

Yet, if he chooses to select only hard line left wingers, the market will not rally. After witnessing the extremely well planned and hard fought victory, we would be shocked to see a concentrated (leftist) cabinet:. We are confident that will not occur.

2) The pressure from Warren Buffett on President elect Obama to call for a change in mark to market accounting from the SEC, or announce a huge infrastructure stimulus plan plays a factor in our short term bullish call as well.

Berkshire Hathaway just reported a horrible quarter, and even if Buffett is okay with paying higher taxes, we know he does not want to see his almost perfect legacy wither, wilt, and die in his waning years.
Other recent Buffett investments in Goldman Sachs (GS) and General Electric (GE) have underperformed as well, and both of those companies will survive this wickedly panicked market.

3) The financial sector could begin to stabilize as it shrinks. The S&P is heavily weighted with oversold financials.  Approximately 20% of the S&P value lies in financials, so be cautious. Regional banks could begin bouncing with 50%+ buy-out premiums. Rumors abound that Citigroup (C) is very close to bidding for a regional bank with government TARP money.
Story here

This would ignite a type of forest fire under financials, forcing many perma bears to cover their seemingly bullet proof short positions.

We will take advantage of what we view as monopoly money about to be used to boost stocks like Regions Financial (RF) and/or Suntrust Bank (STI).

4) Intel's (INTC) (see MarketClub's latest prediction here, ed note) report of lowering numbers after hours creates the perfect set-up for hedge funds to close or enter new positions before they step foot on Capital Hill, Thursday. Please remember these managers are either long, short, or in cash at this point, so we expect the INTC news to shake out the wounded, weak, and desperate long herd, and flush out the dynamic kings of cash, specifically Steven Cohen and Paul Jones: Story here

These managers are patiently waiting to take over your shares when your fear factor boils over Thursday, turning their greed gauge on auto pilot in search of inexpensive generals. Will you allow them that satisfaction?

Four examples of best-in-breed generals at these levels are: Apple (AAPL), America Movil (AMX), Chicago Mercantile Exchange (CME), and Google (GOOG).

POTC feels the S&P index could settle above 1,000 by Thanksgiving, and as the bear rally gains momentum from one or two other positive developments mentioned above, then 1,100 on the S&P could well be reached before we wish you a Happy New Year.

Psychologyofthecall.com