USO - Powell Rally Vanishes Qualcomm Heightens Apple Concern Mother Of All Reports Ahead | Benzinga
To gain an edge, this is what you need to know today.
Key Events Ahead
Please click here for an enlarged chart of SPDR S&P 500 ETF Trust (ARCA:SPY) which represents the benchmark stock market index S&P 500 (SPX).
Note the following:
- The chart shows the steep rally that started on Powell’s press conference.
- Yesterday, we wrote:
If political Powell shows up, expect a rip roaring rally.
- Three groups of investors were buying.
- Investors driven by macro bought on the belief that Powell gave an all clear signal for buying stocks.
- Investors who follow traditional technical analysis aggressively bought because a technical buy signal triggered.
- The momo crowd was buying because dovish Powell showed up.
- The chart shows that at the peak of the rally when buying was very aggressive, The Arora Report took a contrary view and wrote in the Afternoon Capsule:
In The Arora Report analysis, there may be a re-think of the stock market rally as Powell was not able to support his dovishness with data or compelling argument.
- The chart shows that The Arora Report call has proven prescient as all of the stock market rally was given back.
- Two key events are ahead:
- Apple Inc (NASDAQ: AAPL) earnings
- Jobs report, also known as the mother of all reports
- The momo crowd’s pattern is to buy ahead of key events. The reason is that the momo crowd buys on hopium and does not take risk into account. Today is no different. The momo crowd is aggressively buying ahead of Apple earnings and the mother of all reports. In contrast, smart money knows that key events present risk. To reduce risk, smart money tends to trim ahead of key events.
- Apple will report earnings after the market close. Here are the key points:
- Analysts expect about a 5% drop in Apple revenues.
- If analysts are right, this will be the fifth of the last six quarters with a drop in Apple revenues.
- We have been sharing with you the problems Apple is facing in China.
- Qualcomm Inc (NASDAQ: QCOM) owns patents on key technologies that power ...