Apple’s third ‘death cross’ in five years (with CNBC video)

“The death cross is a chart pattern indicating the potential for a major selloff.” — Investopedia

Apple’s short-term moving average just crossed its long-term moving average.

death cross dec 2018

Click to enlarge.

Cue the video:

Apple is about to enter a death cross, and it could foreshadow trouble from CNBC.

My take: I don’t know much about technical analysis, but I’m wearing garlic, just in case.

49 Comments

  1. Matt Tanase said:
    Give TraderVic his dues, he called it a few weeks ago. How low can it go and when do you push all in 🙂

    1
    December 21, 2018
  2. victor castroll said:
    as long as you keep pretending this isn’t about aapl, you’re doing it wrong.

    this is about aapl.

    as for what i’d do (and doing), sto jan 2021 120p for $10 effectively forcing you to buy aapl between now and jan 2021 for $110. i wish that’ll happen but it won’t. so, ill just collect $10 of free money.

    as far as how low can this go? i haven’t had a chance to check yet but i did notice az was talking about $118 and that’s certainly possible. also, a 50% retrqcement of the high is $116.50 so it’s certainly possible.

    my trades right now are selling puts to open across the board.

    0
    December 21, 2018
  3. Fred Stein said:
    Apple’s future earnings could drop to 1/2 of trailing and still be twice the 10 year treasuries rate, even after the latest hike by the Fed. And not including buy-backs which would increase EPS by more than 10%.

    2
    December 21, 2018
  4. Matt Tanase said:
    If Apple is indeed buying hand over fist here (I hope they are), what happens when the buyback blackout hits after New Years?

    0
    December 21, 2018
    • Dan Scropos said:
      Earnings season is upon us, and once again there are dire warnings that stocks will be weak because companies are entering a “blackout period” where they will not be able to buy back their stock.
      As with many old saws on Wall Street, there is a little bit of truth, and some outright untruth, to this idea.
      Here’s the truth: There is no federally mandated blackout period. And even when companies have themselves adopted blackout periods, they can get around them.

      For starters, most companies have regular buyback plans. These plans extend to the company, but also to senior executives.
      The SEC established rules governing the conditions under which companies can buy back stock: They cannot do so at the end of the trading day (in the last 10 minutes), they have to use a single broker for the trades, they have to buy shares at the prevailing market price, and they can’t be more than 25 percent of the average trading volume over the previous four weeks.
      In addition, company executives may have access to inside information, particularly in the period when they are gathering corporate financial information immediately before an earnings report. Most publicly traded companies have established blackout periods that typically restrict trading in shares just prior to the quarter end and immediately after the company reports.
      There is no mandated period, but Raymond James has noted that it is typically two weeks prior to the end of the quarter through 48 hours after earnings are released.
      For a company like J.P. Morgan Chase, which reports Friday, that would mean a roughly four-week blackout period.
      Does this mean J.P. Morgan could not have bought back shares for the last four weeks? No, it doesn’t.
      Under a separate SEC rule, companies can do a share repurchase program even during a blackout period. This separate rule (it’s called Rule 10b5-1) permits trading during the blackout period providing the companies have set up a plan to buy back stock on a regular, defined basis. The price (minimum and maximum) and amount of shares that are being bought must be specified. If they do this, they are afforded a “safe harbor” against any insider trading accusations.
      In other words, a company — and its executives — can buy back shares during a blackout period, providing they are doing so according to a predefined plan.
      Unfortunately, the SEC does not mandate that companies disclose when they are using this rule, so it makes it difficult to determine who is doing what.

      3
      December 21, 2018
  5. Dave Ryder said:
    @Victor, I’m still not clear how to square the TA with Apple fundamentals.

    0
    December 21, 2018
    • victor castroll said:
      @ dave. explain. i’m not quite sure i understand the question.

      0
      December 21, 2018
    • victor castroll said:
      might be a good article here. my “editor” and i are looking for
      one. and i’m in the holiday spirit.

      0
      December 21, 2018
  6. Dave Ryder said:
    Apple hasn’t adjusted their Dec Qtr guidance (as @Victor expected them to do a day or two ago). I don’t think they are required to do so but I HAVE to think most investors interpret Apple’s silence as confirmation of their guidance. If so, then it’ll all come down to guidance for the March ’19 qtr (as is typically the case.)

    5
    December 21, 2018
    • victor castroll said:
      this quarter is fine. i just got some tasty news that all is well.

      enjoy the holidays and i hope you sold some puts or backed up the truck here.

      i did.

      0
      December 21, 2018
    • Gregg Thurman said:
      Since 1997 Apple has warned exactly once and that was in December 1999.

      Since 2010, when I started tracking Apple’s performance against management’s guidance, Apple has never failed to meet the low of revenue guidance. That’s the point of guiding a range.

      When Anderson was CFO management would typically beat revenue guidance by 15% – 20%.

      Oppenheimer guided much closer beating revenue guidance by about 5%.

      Maestri is the most conservative of the three, guiding (on average) low of range revenue to within 3.42% of actual performance, and high of range revenue to within -.56% of actual performance. Another measure of Maestri’s guidance accuracy is the amount of the range that Apple actually achieves. That amount is 88.81% of the high/low range gap.

      If we use those averages we get an actual revenue estimate between $92.044 Billion and $92.591 Billion. The high/low range gap that Apple achieves indicates actual revenue of $92.552 Billion.

      So we have $92.044 Billion on the low end, $92.552 Billion range achievement and $92.591 on the high end. Keep in mind that these calculations are based on averages.

      With 13 quarters under his belt, we have a good sample of how Maestri guides relative to performance. Like I’ve said before, I trust Maestri’s guidance over any analyst estimate.

      Because I expect WS narrative re: iPhone XS/XS Max/Xr sales to be overly conservative my revenue estimate is $92.874 Billion.

      4
      December 21, 2018
  7. Aaron Belich said:
    Uhhh, 26-27 million shares exchanged hands at the bell. Am I reading that correct!? Wow!

    0
    December 21, 2018
  8. Doug Montgomery said:
    Quadruple Witching Day probably played a role in the large volume at the close.

    In either the current quarter or next quarter on Apple’s calendar do we have an extra week either in the YOY compare or in the next Qtr that might impact Rev guidance?

    0
    December 21, 2018
    • Jonathan Mackenzie said:
      “In either the current quarter or next quarter on Apple’s calendar do we have an extra week either in the YOY compare or in the next Qtr that might impact Rev guidance?”

      Extra weeks occur in Apple’s 1st quarter every 6-7 years depending on leap years. The next odd quarter is not due till 2022 I believe. The last one was fiscal q1 21017 (q4 of 2016 on the calendar) and YoY comparisons were made to it last year (calendar q4 2017).

      0
      December 21, 2018
    • Aaron Belich said:
      @Doug, thank you for pointing that out. So much I don’t understand.

      @Victor, After listening to Neil Cybert’s latest podcast, I’m starting to agree with you. I need to take the emotion out and look at not just the fundamentals of Apple, but also that of the goofy, damn Market. 😛

      1
      December 22, 2018
      • victor castroll said:
        hey aaron, is the podcast behind a paywall?

        0
        December 22, 2018

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