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Apple Inc Sinks $33 (5.5%) On Earnings Miss! SPX, Nasdaq, BIDU, BTU, WLT, CLF, UPS, WHR, NFLX, AAPL, PCLN, RVBD, ACOM, TRIP, PNRA     

The overall market tone in the past couple of days had been negative.  The financial crisis in Europe still hung like a dark cloud over the global markets.  Bulls have been fighting hard to keep support levels.  We locked in some profits, including calls on AAPL:

  • 07:50 | Ecstatic Plays AAPL ($606.30) Sold to Close 0727C620 Jul 620 calls, at $9.35 +56%
  • 11:53 | Ecstatic Plays AAPL ($604.20) Sold to Close 0727C620 Jul 620 calls, at $9.60 +60%
  • 08:54 | HappyTrading CME ($50.58) Sold to Close 08P50 Aug 50 put, at $1.30 +38%
  • 07:32 | HappyTrading CME ($50.30) Sold to Close 08P50 Aug 50 put, at $1.50 +60%

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Yesterday, BIDU reported a strong quarter and propelled its stock to just above $120/share intraday.  BIDU closed at $114.95, up +7.33%.  This morning, BTU missed its earnings estimates again and gave disappointing guidance; its shares fell more than 11% today.  WLT and CLF (reporting tomorrow after market) also went lower.  WHR's earnings also came in on the weak side, sending its stocks down 7.52%.  UPS fell 4.63%, after lowering its full-year forecast.

Bigger news came after the market today.  None bigger than AAPL's earnings, which missed the estimates!  AAPL shares dropped $33 this evening, or 5.5%.  We got out of our weekly calls this morning.  The market was just too weak.  If AAPL were to report great numbers, the market would have been buying ahead of AAPL's earnings.  The trading actions today was convincing enough for me that the market did not think too highly of AAPL's last quarter.

NFLX also sank (almost 17%!!) on earnings.  Although it beat the estimates, its net income fell 91% and the guidance was weak.  I think we'll soon see NFLX in the $50s!  NFLX traded down to $67 this evening, from an $80 close.  TRIP tumbled nearly 15% after missing its revenue expectation.  PCLN traded down almost $15 after the news.

Now, some news on the positive side.  RVBD popped more than +23% on a earnings beat and a strong forecast.  PNRA vaulted +7% after topping its earnings estimates.  ACOM surged almost +16% after another round of buyout rumors.

The Dow was down 104.14 points; SPX shed 12.21 points; Nasdaq dropped 27.15 points:

XME (metals and mining) fell 3.22%.  FDN (internet) dropped 1.9%.  XLE (energy) was down 1.6%.  IGV (software) slipped 1.67%.

SPX

SPX slipped 12.21 points to close at 1338.31.  It closed below 1340 and below its daily MAs.  The MACD also turned down.

Nasdaq

Nasdaq fell 27.15 points to close at 2862.99.  It also closed below its daily MAs and the MACD went down.

With AAPL's earnings miss, the market will likely be pressured again tomorrow.  As discussed in this weekend's Market Forecast, below SPX 1340, the market could turn bearish.  All 3 major market indices closed below their respective daily MAs today.  We'll have to see if buyers will keep jumping in to try to hold the support levels.  The strongest sector has been agriculture.  If the agriculture stocks start to roll over, we'll get the some hints of bears taking over.  Financials have, so far, been holding.  We'll keep our eyes on them as well.

Good night and HappyTrading! ™

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