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This market has shown us that it has no memory from day to day. While that trait may be helpful in the short run to those of us who are net long, the tail wind may not even last through to today's closing bell. By the time we get to tomorrow, new events such as Apple's earnings, the upcoming EU meeting, the U.S. debt ceiling debate, or other economic reports could trigger a 180 degree turn.
Here's a specific example of a potential change inducer. I have seen a research study regarding the market's movement following the release of Apple's quarterly earnings. The study related that in those instances when the earnings report is released at a time when Apple's stock traded at a 52-week high the day before (as is the case now), then the Nasdaq 100 was down for the day of the report 75% of the time. The next trading day also saw the nasdaq 100 down 3 out of 4 times. In fact, over a 3-day period the Nasdaq 100 was down on every occasion.
After that the news got much better. In the weeks following the mini-drop the market rallied every time. The implications from this study by the folks at Sundial Capital are clear enough. We should sell into today's rally, play for a small dip, then buy 'em with both hands and enjoy the rally.
The problem is that in this study we are working with only 4 data points.
Thus I will add this to my knowledge base, but I will not rely upon it heavily. Certainly it could be a factor. However the numerous other events taking place could easily outweigh whatever effect the "Apple Syndrome" may have.
Have a good one...
Curt B.
Options Manager: Daily Decision-PRO
Apple - Last 12 Months
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