Thursday, October 25, 2012

I'm tracking FedEx more closely now (see today's touts), since the firm's shares have held up relatively well over the last couple of weeks.  FDX's out-of-synch quarterly earnings are due out in December, but until then it will be interesting to see whether the stock is predicting a strong holiday shopping season or merely bucking the bearish tide until such time as it turns even stronger. Click here for a free look at the trading-touts section of Ricks Picks.

Although earnings guidance for the quarter ending Nov 30 was nothing to celebrate, FedEx shares have held up relatively well in comparison to those of companies that have disappointed in the last two weeks. Bulls are in fact working on a couple of patterns that point confidently higher, the larger of them to 104.00.  Does this perhaps augur a strong holiday shopping season even as the country slips into statistical recession? That's one possibility, although we might also see buyers abort the several bullish patterns here, relapsing into synchronicity with a stock market that has turned weak.

Oversold nearly to death as 2012's freakishly mild winter ended, Natural Gas futures are finally recovering some of their mojo with a 30% surge in the last month. Another leap is augured by the daily chart, which shows this vehicle in a consolidation with the potential to hit 4.214 when buyers get back in gear. Assuming the 'C' low at 3.609 holds, bulls would encounter key resistance at the 3.9115 p midpoint of the pattern shown. My hunch is that they'll be on their way to D (4.214) following a two-day close above the midpoint.

I'm canceling the hell-of-bearish target at 13.97 and the death sentence I disseminated in August, since Facebook has come up with the first great money-making idea I've heard from them since the abortive IPO in May. In brief, the plan will leverage the birthday, anniversary and special occasion wishes that Facebookers send each other by enabling them to add flowers, chocolates or other gifts with the click of a mouse. This could be a huge winner, since it will allow advertising tie-ins between Facebook and a broad variety of retailers and possibly even a percentage deal for them. Gift givers will love it too, since it will make them look like they actually care enough to go one thoughtful step beyond the automated, and therefore perfunctory, special-occasion greetings that have become annoyingly familiar to so many of us. Why the Street Is Wrong Please note that my bullishness is unrelated to the $153 million in revenues the firm booked for mobile advertising in the last quarter.  Wall Street went ga-ga over it because this category didn't even exist for Facebook as recently as last spring.  My gut feeling, however, is that too many advertisers will be competing for eyeballs on 'billboards' with extremely limited space, and that users of smart phones and pads will resent the intrusion, the moreso if it becomes too aggressive. In the meantime, we'll wait for the right buying opportunity in the stock, since attempting it now, following yesterday's 25% move, does not interest me. Stay tuned -- and be sure you're signed up for email notifications if you wanted to be notified in real time of any possible intraday opportunities. For your information, yesterday's move was not bullishly impulsive on the daily chart, since it exceeded no external peaks.  It did, however, bring the stock

Explosive methane sinkholes, stratospherically rising cancer risk and crude oil making its way up the food chain? This is the scariest story that has come my way in quiet a while -- the moreso because its author, The Common Sense Show's Dave Hodges, writes, spells and punctuates like an intelligent guy. A big part of the problem appears to have originated with Corexit, a carcinogen that was used to disperse oil from the Deepwater Horizon blowout several years ago.  Click here for the full story.

Although Apple shares have gyrated wildly this week, soaring $27 on Monday and then plummeting $18 the day after, the stock is probably just warming up for the big event later this week. Our guess is that the company will announce stellar earnings after the bell on Thursday, but that attempts to rally the stock will be overwhelmed by the bearish tide of Q3 earnings reported to date.  Earlier in the week, we had raised the prospect of a resurgent Apple pulling the broad averages higher.  However, given the relentless drumbeat of misses, warnings and dismal numbers from the likes of Google, IBM, Microsoft, GE, Caterpillar and a few other corporate biggies, it is evidently not just an earnings hiccup that investors have been discounting via two big selloffs in three days, but the onslaught of a potentially deep recession that has been in gestation since late summer.  Under the circumstances, it is probably asking too much of Apple to single-handedly buoy investors’ hopes for the remainder of the year. So what, then, of our prediction that AAPL’s performance this week will set the tone for the stock market in the months ahead?  As things stand, and notwithstanding the prospect that monster earnings will be announced, we’d be surprised if Apple shares end the week significantly higher than where they are now. The stock settled near $613 yesterday after topping at $634 intraday, but unless more such gyrations vault peaks #1 and #2 in the chart above by Friday, it’ll be a rapidly deteriorating technical picture that Apple shareholders face next week. 2500-Point Dow Plunge In an earlier commentary, we said the Dow could drop 2500 points quickly when the delusions that have long sustained the blue chip average finally gave way.  Short of the appearance of some horrific black