Morning Call: Apple (AAPL) Sell-Off Only Muted After Steve Jobs’ Resignation
US stock futures are marginally higher this morning as they look to continue their rally into Friday’s Fed announcement from Jackson Hole. The big story overnight was obviously the resignation of Apple CEO Steve Jobs. The visionary leader of the world’s 2nd biggest company (by market cap) has been largely responsible for the rise of a retail empire. His creative brilliance has come to create and define market segments, from mp3 players to smartphones to tablet computers.
Many forecast a “Steve Jobs crash” the day that he left his position with Apple (NASDAQ:AAPL), but in fact the reaction has been rather muted. The stock was down around 5% last night when the news broke, but this morning investors are aggressively buying the dip and the stock is now down only 1.5%. Jobs’ ill health and possible resignation seemed to be baked into the stock price to some degree, and now clarity on the situation could free it to make a big run. On a fundamental level, AAPL is extremely undervalued.
As for the other major stories in the market, Gold (NYSE:GLD) continued to pull-off last night after more margin requirement hikes, but has rallied a bit in the pre-market. When an asset makes such an extended run like Gold, it is frustrating not be involved in the trade, but the last thing you should try to do is jump in late. While this is on a much smaller scale, we saw a similar pattern play out with silver, which confounded traders by accelerating higher day after day before crashing. Gold has erased six days worth of gain in only two trading days. When/If Gold gets down into its 21-day moving average, that could be a spot to buy the dip.
In terms of the technical outlook on the market, the (NYSE:SPY) has room to get up into the $120 area before Friday’s announcement, but I wouldn’t get greedy at these levels in this bipolar market. Precious metals seems to acting skeptical over the possibility of QE3 so soon, and the market may even view such a measure as a negative after the gains from QE2 were erased so quickly.
Traders will be watching complexion closely today in the T3Live Virtual Trading Floor, so make sure to stay tuned. Traders love the opportunity that this volatility brings, but you must be able to harness it in order to control risk.
Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the service and acts as the face of T3 Live. Mr. Redler focuses on thorough preparation and discipline as a trader. Scott Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Scott moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, he maintained his status as a top trader in the industry while working closely with all traders in the firm to dramatically increase performance. Scott has participated in more than 30 triathlons and one IronMan triathlon, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business and Bloomberg, and he has been quoted in the Wall Street Journal and Investor’s Business Daily among other publications. Scott produces much of the media and content available to subscribers and followers. T3LIVE.com is an online financial media network and education platform that provides active traders and investors with market analysis, real-time access to strategies, and in-depth training from real traders, real-time.
*DISCLOSURE: Scott Redler is long (NASDAQ:AAPL), (NYSE:MGM), (NYSE:SPY), (NYSE:MS), (NYSE:BAC).
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