Apple shares took a stealth approach yesterday to achieving a 199.90 rally target that we’d touted last week as a “lead-pipe cinch.” The stock had gyrated gratuitously all day, settling a measly $2 higher at 189.95; then, after the close, it rocketed $15 higher. It’s hard to imagine why every investor on the planet would not have been long AAPL shares when regular-hours trading ceased at 4 p.m. Eastern. Shortly thereafter, Steve Jobs & Co. announced a 47% jump in quarterly profits. This could have surprised no one who has been to the mall lately, since Apple stores are among the very few that teem with activity at all hours of the work day, not just on Saturday afternoons. (We should mention that Verizon stores share this trait, as far as we have been able to observe.)
As of early Monday evening, AAPL had soared as high as 204.85, somewhat exceeding our target. This suggests there are even larger, bullish forces yet to play out, calling for rally target of higher degree. Here it is: 231.00. That is what we call a “Hidden Pivot,” and it would very nearly max out Apple’s bullish potential on the longer-term charts. What could possibly put a lid on the share price of this world-beating company? Nothing that we can imagine – other, perhaps, than a deepening of the recession to such an extreme that Apple’s key demographic – i.e., hip, young telecommunicators who live in the Cloud – would be pressed to choose between eating Spaghetti-o’s or being less connected to cyber world.
Microsoft a Me-Too Failure
Incidentally, the rally target at $231 should not be taken as a guarantee that merely buying the stock at these levels will make you money. Indeed, a $45 pullback to around $154 (a Hidden Pivot) would be perfectly healthy within the larger, bullish trend – so caveat emptor! What amazes most about Apple is that the company continues to make huge profits the old-fashioned way, selling products that outclass the competition by a wide margin. Under the circumstances, we expect Microsoft’s me-too foray into retail to be a loser, though perhaps not a disaster. Moreover, with cloud computing pulling PC users away from Microsoft’s core products, the firm is running out of time to find a future for itself.
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Rick, yesterday was the point where the deflationists were brought to maximum pain and doubt in their thesis.
Shocking USDX 40 call by Denninger in his web show “I think it’s going to 40”. Sounded like Schiff!
And even the great Mish felt the need to post that he was insured with gold against a dollar crash.
But Bernanke is just playing the cards we should expect. We are about to start a nasty C Wave down and wouldn’t Bernanke want the dollar to be at the bottom of its range at the turn? Of course he would. Seems like utterly predictable strategy from Bernanke but the finance world is 97% bearish on the dollar.
TPTB will make damn sure the dollar does a sawtooth decline and not a “disorderly crash”. We are not Argentina and the G-20 is not going to the let the dollar crash like so much banana republic script. Another significant dollar rally coming.
PS European banks are starting to crack. The crowning of King Euro is undeserved. Talk about No Clothes. Watch the EU itself collapse in the next several years.
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Wake me when all those worthless dollars start pushing up the value of my home. RA