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Minyanville's T3 Morning Market Call: Traders Focus on Earnings


Apple is a great macro long-term hold.

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Markets are still using the road map they created since the June 4 lows. We opened below the intermediate trend line, then closed above it, and we are currently about halfway off the lows. Those embracing this pattern are making less but are not as frustrated as those who are fighting it. I think within the next few sessions we will know if the pattern changes, and I will help those who follow me capitalize on the opportunity when it occurs.

It is hard to ignore the complexities that are taking place in Europe, as the recession is starting to rattle the core of even the strongest nations. Today inspectors go to Greece, and the game of chicken they are playing will reach a resolution soon. France wants to lower the retirement age and raise taxes (especially on financial transactions); good luck to them. On the Eastern front, China's numbers were a bit better than thought last night, but growth still seems to be slowing there.

SPY micro resistance stands around $135.46. If the bears can continue to apply pressure, they can break the current ascending channel, and keep the bulls from reclaiming the $136 zone. Micro support stands at $134.40-$134.60, and the new point of reference is $133.84-a close below this area in the next few sessions will resolve pattern to the downside. The SPX still has the same resistance around 1358-1362.

I do think Apple (AAPL) is a great macro long-term hold. I believe this should be in your portfolio if you are in long-term stocks.

I typically take Apple long into its earnings report with some type of option strategy. Today I will be flat, as I don't see the need. I will trade it after the report, for this time could have some extra volatility. If great numbers push the price above $620, I would buy it because it may ignite another move up. The support to watch is the 50-day which is $580, but that might be a little too early. $560-$565 has proved to be a big support level and could easily be seen if report doesn't deliver. That also makes it a good region to buy. A fall to $525 would make the stock a steal.

I've been out for a few days, but I will be back on a normal schedule as of today. I apologize for no big calls or major conviction. In this trading range, it is hard to make decisions with size or even have a big thesis. I do think by 2015 we will see S&P at 1700 as opposed to 1000, but there will be a lot of trading between now and then.

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