Apple's Earnings Report April 2012

Apple apparently came out with a favorable earnings report, as usual, and that is boosting the stock by over $40 above its closing price Tuesday evening. Apple has been a drag on the Nasdaq over the last couple of weeks as many weak longs exited positions. It will be interesting to see if this ultimately becomes a dead cat bounce or a new leg up in the stock. The first key price level is 620. If it struggles with that level in the next week, it will likely test today's low around 555. The overall stock market has been in a tight range dating back to mid-March. There is an obvious potential head and shoulders top in the Dow Industrials, and a break below 12,700 would be the breakout level of that pattern to the downside. Keep in mind, however, that this pattern can be a great continuation pattern to the upside as well if the downside breakout fails, and then the market breaks above the high of the right shoulder. No matter what, we are currently in consolidation during the beginning of a seasonally weak period. With the general election season underway, and all signs pointing to a close election, the market faces significant uncertainty. Add in the issues of Europe, the Middle East, and a slowdown in China, there is very limited certainty as to the direction of the economy. Earnings reports will shed more light on this, but only temporarily. Ultimately, macroeconomic factors will take over, and traders will again focus on these issues. What we are presently left with is a choppy market with many stocks having trouble continuing their recent uptrends. With that in mind, traders and investors should continue to proceed with caution. www.whentobuyandsellstocks.com