Morning Market Thoughts

by DAN Good morning. We’re set for a weaker open in the aftermath of the Apple (AAPL) Q3 earnings report. They have a record amount of cash on hand. Earnings and sales seemed OK, and were roughly at analysts’ estimates — give or take a bit. But Apple’s problem is that analysts tend to be lowering their estimates to account for slower growth. And that’s different than meeting analysts’ estimates that have been raised because of an increase in optimism. So the stock has pullback back to just above the 50-day moving average. If you’ve been waiting for a low-risk entry for AAPL, this is probably it. Stock should stay above the 50-day moving average, which is just 2% below the opening price.

Chipotle (CMG) is also down on big losses and declines in same store sales. I’ve been doing my part to help them out with at least one burrito bowl each week. Apparently it isn’t enough. That stock is set to upen at a 52-week low, falling out of a 5-month trading channel. The stock will need to trade back up to $400 if it is to have any chance of staying in the trading range. If it just continues down from here, the $400-420 level will be like a concrete ceiling reinforced with a lot of rebar. No punching through it any time soon. This is the kind of stock that I used to trade, but have since found that profits are difficult to come by, and frustration is plentiful.

T-Mobile (TMUS) has re-traced some of it’s Monday “Hey, is someone gonna buy T-Mobile” rally? Watch this stock carefully. No telling whether it’ll be bought. But if enough traders are speculating, then we just may have a runner.

OK, that’s it. Sluggish, downward, choppy market — not a user-friendly market. So be selective in two ways: First, you should be buying/owning stocks that are trending higher. Next, you should be stubborn on your entries, buying on pullbacks to support that enable you to exchange your cash for stock at a level that is close to a level where, if hit, you’d conclude that you shouldn’t have bought the stock because it’s going lower rather than rebounding. So you can close the trade gracefully, and with minimal damage.

As the old saying goes, “If you wanna play, you’ve gotta pay.” But you don’t have to get fleeced.

See you in the forum.

Dan

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