rickackerman.com / By Rick Ackerman / July 25, 2012
Apple, the mother of all bellwether stocks, has taken a flying dive Tuesday night on news that Q2 earnings were merely sensational (i.e., up a little more than 20 percent). Presumably unaware that Samsung’s excellent smart phones have been breathing down iPhone’s neck, speculators were evidently caught unawares when Apple’s earnings report included the peevish detail that iPhone sales had slowed markedly. The ubiquitous product has accounted for most of Apple’s revenues in the last few quarters, so even a mild slowdown was bound to stampede pass-line bettors. So, because of Apple’s bellwether status, does the stock’s apparent failure to soar to new highs on this latest earnings report portend tough times for the market as a whole? Very probably, yes. Without Apple to pull shares higher this summer, don’t expect them to make much headway. Regarding Apple itself, although we’d told subscribers earlier to buy the Sep 650 – August 650 call spread for $5 as a relatively low-risk bull play, because of the way the stock is acting this evening, we’ve recommended that the order be canceled.