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MV Weather Report: Apple Makes It Rain

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Rain or shine, we review the day's biggest stock stories.

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Is it 1999/2000 again? The NASDAQ sure thinks it is: The index has risen for 11 straight days.

Today it booked gains thanks to a strong quarter from Apple (AAPL). The company did all the right things: big EPS beat, strength in Macintosh sales, strong 3GS shipments. It also didn't sandbag forward EPS -- a trait Jobs and Co. are known for. Apple closed the day at $156.45 up 3.45%.

Today on the Buzz and Banter, Professor Jason Goepfert gave his thoughts on the incredible rise in the NASDAQ.

"The NASDAQ Composite being up 11 consecutive days? It's happened 17 times since 1971.

"It went on to 12 or more days 10 of those times.

"Very rarely did it ever mark any kind of a meaningful top, despite almost always being 'overbought' in some sense by the time it recorded 11 straight up days. It usually took several weeks (if ever) to see a pullback of significance."


While the Nasdaq is clearly outperforming, the S&P 500 is having a difficult time getting over the 950-955 level. Today the index made a new intraday high of 959 but it closed the session at 953, down -0.07%. Traders seem to be waiting for the S&P to breakout over the 950 level but this move is starting to resemble the pattern back in early June-marginal new highs but nothing that sticks.


Click to enlarge


The main reason I think this is happening is because earnings are now baked into the tape. The market was initially thrown off by the positive results from Goldman Sachs (GS), Intel (INTC), IBM (IBM) and to some extent Caterpillar (CAT). However, as investors have had more time to dig through earnings reports, they are finding that the big EPS beats are due to cost cutting (see 10% unemployment rate) and revenues being less than expected or inline.

With the market stalled here, I find Quint Tatro's views to be very helpful, he weighed in on the Buzz and Banter.

"I am always amazed at just how humbling the market can be. We're only slightly higher than we were a few weeks ago, when we were booking gains in longs and stepping aside.

"Now that we've had this massive run up our psyche, or at least mine, is completely different and the more we run, the more frustrating it becomes

"One can easily curb that frustration by just jumping into the water to splash around a bit unfortunately, for me, it has been my experience this is never a good idea rather stepping away is always a good idea in order to gain more perspective and remain calm."

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During earnings season investors rarely remain calm. Tomorrow we will have an action packed day of reports: Potash (POT), McDonald's (MCD), Baidu (BIDU), Amazon (AMZN), and Microsoft (MSFT) to name a few. Check out the trading radar for the full list.

Have a great night!

No positions in stocks mentioned.

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