Archive for January, 2015

Everyone expects Apple to announce mind-boggling blow-out earnings tomorrow after the market closes.

Normally I would look at that as a strong contrarian signal.

But while everyone is talking about blow-out earnings, the stock is acting opposite… almost as if it’s already pricing in inevitable disappointment.

So what’s a contrarian to do?

My guess is unless something shocking happens — like there were significant production problems that Apple somehow kept secret… which, given the exhaustive research and scrutiny Apple is put under, seems unlikely at this point (as in we would have already heard something) — things feel like they’ve been artificially set up to bounce…

… meaning, the stock should have made a slow ascent closer to its 52-week high… to around $116-$118… and even beyond into the early $120’s… but it hasn’t… it’s been trading at closer to $105-$106 as recently as last week… which means when people finally see that the mind-boggling blow-out earnings are real, we’ll see a bounce into an area where it should have been trading at all along.

So, as weird as this is to say:  A contrarian view about the market’s contrarian view.